“I like to fix problems”: Meet the business executive buying up old Bed Bath and Beyond storefronts
Turnaround specialist Doug Putman on reviving chains like HMV and Toys “R” Us, his foray into the world of home goods, and why brick-and-mortar stores are still relevant
When Bed Bath and Beyond, the home goods retailer once valued at several billion dollars, declared bankruptcy in April, Hamilton-based entrepreneur Doug Putman saw an opportunity. The 39-year-old executive bought 21 of the defunct company’s Canadian storefronts to house a new but similar chain called Rooms and Spaces, which is set to open in July. Putman, a business school dropout, has made a career of buying large failing companies and turning them around: his portfolio already includes HMV, Sunrise Records, and Toys “R” Us Canada. We asked Putman about his new venture, why he believes brick-and-mortar stores are here to stay, and how he developed the Midas touch for big box retailers.
First thing’s first: you just bought 21 former Bed Bath and Beyond storefronts across Canada. Why now?
In December, Bed Bath and Beyond reported its yearly revenue. It was roughly half of what it had been the year prior. So we knew that the company was struggling, and we thought very seriously about buying the brand outright. In April, when we saw that it was going out of business, the plan changed to buying its storefronts. We wanted to make the move quickly—before someone else beat us to it.
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And you’re replacing Bed Bath and Beyond with another home store, Rooms and Spaces. Will it be more of a Homesense or a CB2?
It’s somewhere in between. What we’re planning is a trendy home goods store with well-liked pre-existing brands. We noticed that there aren’t a lot of options in Canada for high-quality, great-looking houseware that’s also affordable—you’ve got really expensive pieces and then the really cheap stuff at Walmart. I want Rooms and Spaces to be a place where you can get the hottest decor or the newest electronics without breaking the bank.
Similar to Bed Bath and Beyond, then. But, given that the company went legs up, I suspect you’re not planning to completely replicate its business model.
No. Bed Bath and Beyond’s financial problems started when its US locations stopped doing well—it was partially the growth of online shopping, but the company also focused too much on selling its private label, which people weren’t super familiar with. The Canadian stores struggled because Bed Bath and Beyond was an American-first company: decisions about what to stock were based on demand in the US. For example, things like duvets were not a focus—they don’t sell as well in the states—but, in Canada, duvet sales are a very meaningful business. That accelerated the company’s demise. Conversely, Rooms and Spaces will be more local.
Is there any business advantage to being based in Canada?
The opposite, actually. Canada is generally considered to be a tougher market, mainly because the population is spread over such a large country. But Canadians are very loyal to the companies they choose.
You have a track record of buying failing businesses and turning them around—HMV, Toys “R” Us and Sunrise Records, to name a few. What’s your secret?
We buy things that other people don’t see the value in. For example, a lot of people don’t understand how a store like Sunrise Records is still in business. Even in the age of streaming, people like the surprise and delight that you get when physically browsing through tens of thousands of items. One thing we do with our stores is add variety. At Sunrise, for example, we now sell vinyl, DVDs and CDs, and at Toys “R” Us, we’ve added a whole section for kids’ books. We also buy businesses with fundamental issues that we know we can fix. For Bed Bath and Beyond, as I mentioned, it didn’t have the right stock. That’s easy to solve.
Why do you gravitate toward failing businesses instead of thriving ones?
I like the challenge. Buying a business that is already doing well isn’t interesting—I like to get in there and fix problems. It’s in my blood. When I was 18, I went to Wilfrid Laurier University for business. I didn’t enjoy it, so I dropped out after one year to work at my parents’ family business, Everest Toys. My mom told me that she would pay me minimum wage plus commission, and she encouraged me to leave and start my own career. But, once I got in, I knew that finding ways to make existing businesses thrive was my passion. The value of Everest Toys went from $3 million to $100 million—we pushed hard for that growth, working constantly to acquire new customers and suppliers.
You make it sound pretty straightforward, but why do so few people specialize in turnarounds the way you do?
Risk is certainly part of it. People might think, How does it make sense to buy a company that is about to be bankrupt? It’s also just a lot of work. When you buy a distressed business, you have to make massive changes, and that takes time and effort.
Why are you so bullish about brick-and-mortar stores in the age of online shopping?
Over the pandemic, online stores had a clear advantage. But, once lockdowns ended, people did return to in-person shopping. This year, we’ve had no layoffs in our existing brick-and-mortar chains whereas Amazon and other online-only shops are letting employees go. Of course, Rooms and Spaces will have an online offering too—it’s an important part of the equation—but brick and mortar is our advantage. When you’re on site, you can touch and feel the products, hold two different brands of coffee maker and compare them. You can’t do that on a website.
It sounds like you have a lot on your plate. What does a day in your life look like right now?
My day usually starts around five in the morning. I hit the gym, have breakfast and then spend the day answering emails, getting on calls and putting out any fires that may have popped up. I make sure to have dinner with my family every night—that’s number one. My daughter is four years old. It’s such a fantastic age. She doesn’t care about what’s going on with my work or how much money I make. To her, I’m just her dad, and I have to pick up her clothes when they’re on the floor. After we put her to bed, I usually squeeze in a few more hours of work. It’s busy, obviously, but I love it.
This interview has been edited for length and clarity.