koreanjohn32

The Bombay Company: Going Back To Its Roots

When a public company starts failing dramatically, the wrong thing for a board to do is to simply try to raise public confidence by hiring the next CEO, without really thinking about what they can actually bring to the table.

When I read about Stewart's leadership for Bombay, I realized that the Board of Directors were simply grasping at straws to buoy investors. Stewart's expertise (and his age, mind you) is in a vastly different business segment than what's required in home decor. The success of home decor is ever closely tied with fashion. How does someone of his "talent" translate success at a movie rental service into reviving a failing home decor house? The stretch is so obvious that it's almost sickening.

A smart group of directors would have stopped and taken their breath. They would have held onto the rail of the boat they were on in stormy seas, and realized that they needed to take stock at where they are and how they got there. They would have realized that they needed to make some critical changes in their approach by comparing how successful decor houses approached product design and development and how Bombay differs. They would realize that they needed to make changes and done so.

Bombay's Downward Spiral (BBA)

Bombay's failure is a failure in it's overall vision. Historically, Bombay has promoted its buyers into higher positions and kept it's design team subject to the whims of individual buyers. Rather than create an overall design strategy, this resulted in a hodge-podge, value-basement look.

Design and design vision married with strong business sense is the key component behind all the successful home decor houses. Bombay had strong market share when there was nobody else in that market. However, with the rise of Target and other discount home decor houses (including Walmart), Bombay's lack of vision and overall design strategy became obvious. Rather than fix the core issue within and resolve their philosophical approach, they resorted to promotional gimmicks which kept sales afloat but without any long-term, brand-building objectives.

The fact is that they did have time to correct the issues, but nobody really wanted to face the music. Other than someone coming in and "cleaning house," the existing, stagnant organization is not going to be able to recover. Bombay is in dire need of fresh blood, albeit a bit autocratic in approach. Someone with strong vision and the ability to execute it quickly.

What Will Save the Bombay Company?

Having actually worked at Bombay, albeit a short six months, I can say that the issues are more about a stagnant organization that has grown accustomed to underperforming and a missed consumer focus. Bombay started to ignore it's real customer base, a 60-something woman with fairly conservative taste, and tried to be the next player next to Pottery Barn, which is also doing badly at the moment. It moved quickly, but without really giving too much thought to how it could effectively shift so radically and still maintain growth.

How does one shift market perception about what a company is about? Abercrombie and Fitch moved from being a sort of "Brooks Brothers" men's store into a hip, sexy fashion statement, and like LG (Lucky Goldstar), A&F was able to leverage it's name in a new way. Unfortunately, Bombay Company hasn't been able to do the same. Would it B&C?

Maybe I'm being a bit of a geographical snob, but perhaps high fashion is just not going to emerge from someplace as landlocked as Fort Worth(though they do have some great museum architecture). The cool designers seem to like Los Angeles, or New York. Even so, perhaps the biggest failure that this business model suffers from is that, being a design house, design was never the focus. Rather numbers were, even as the brand image suffered. How does a company like this survive such long-term abuse?