Bed Bath & Beyond (BBBY)

BBBY's acquisition of buybuy BABY for $67 million and the repayment of $19 million in debt from one of its co-founder's sons has investors wondering what the true motives for the acquisition were.

In FY 2009, Bed Bath & Beyond opened 67 new stores. They had planned to open 60 stores in FY 2010. However, even as the economy strengthens and the store's sales increase, the company hasn't been able to keep up with its desired expansion. Trough the first three quarters of 2010, BBBY has only managed to open 23 stores. Slower expansion means slower growth, which could affect BBBY's stock price.

Although BBBY has the experience to grow its subsidiaries and has talk of an expansion plan, it is unclear when that growth will occur.

The current recession has reduced consumers' demand for home furnishing products. In fact, sales figures from the home furnishing industry fell 13.5% in October 2008, and sales are expected to fall even through the 2008-2009 Christmas season. BBBY is expected to post negative comparable store growth in Q3 and Q4 2008, and the home furnishing retail sector is not expected to reverse this loss during this time of economic hardship.