Marcus Lemonis Rules Out Bed Bath & Beyond’s Return to California, Citing Unfavorable Business Climate

August 20, 2025 — Marcus Lemonis, executive chairman of Bed Bath & Beyond, has definitively stated that the once-iconic home goods retailer will not be making a comeback in California. Lemonis attributed this decision to what he described as an unwelcoming environment for businesses across the state, underscoring longstanding debates about California's regulatory landscape, cost structures, and competitiveness compared to other regions.

The announcement has sparked renewed discussion around the challenges companies face in California, where high taxes, strict regulations, and a steep cost of doing business are often cited as deterrents to corporate investment.

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Bed Bath & Beyond’s Troubled Journey

Founded in 1971, Bed Bath & Beyond grew into a household name synonymous with sprawling stores stocked with home essentials, from kitchenware to luxury bedding. For decades, its expansive footprint across California reflected the state’s robust consumer market, fueled by millions of households and a reputation for trend-setting in home decor.

But by the late 2010s, the retailer began struggling under the weight of mounting competition from e-commerce giants, shifting consumer buying habits, and the costs of maintaining large-format stores. The rise of digital-first competitors like Amazon, alongside nimble home-focused chains such as Target and HomeGoods, cut into its market share.

By 2022 and 2023, Bed Bath & Beyond faced bankruptcy proceedings and nationwide store closures, including many in California, which had once been one of its strongest markets. After Lemonis and his investment group acquired the intellectual property and sought to relaunch the brand, speculation swirled about whether California might again see stores reopen.

Lemonis has now confirmed that will not happen.

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Why California Is Off the Table

In his statement, Lemonis stressed that California’s economic and regulatory climate makes it nearly impossible for companies like Bed Bath & Beyond to operate profitably. Several factors have been identified:

• High Costs of Real Estate and Labor: Commercial rental rates in urban hubs like Los Angeles and San Francisco remain among the highest in the nation, compounded by rising labor costs due to the state’s progressive minimum wage increases.
• Regulatory Complexity: Businesses often cite California’s extensive labor laws, environmental standards, and consumer protection regulations as obstacles that require significant compliance spending.
• Tax Structure: California imposes some of the highest state income tax and corporate tax rates in the U.S., often pushing companies to consider alternative states with more favorable rates.

“California makes it very difficult to operate at scale,” Lemonis remarked. “For a retailer that has razor-thin margins and must constantly adapt to consumer preferences, the added cost burden and regulatory challenges simply make the state unviable.”

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Regional Comparisons: Where Bed Bath & Beyond Is Growing

While California is no longer under consideration, Bed Bath & Beyond's revival strategy is targeting states with what Lemonis has described as “friendly business environments” and strong middle-market consumer bases.

• Texas: Widely recognized as one of the most business-friendly states, Texas offers lower operating costs, no state income taxes, and significant urban growth in regions like Dallas, Houston, and Austin.
• Florida: With a surging population and no state income tax, Florida has become a magnet for both corporate relocations and retail expansion.
• Arizona and Nevada: Proximity to California but with far lower tax and regulatory burdens makes these states attractive alternatives for retailers seeking to serve the West Coast population.

The strategy echoes moves by numerous corporations across industries that are shifting operations out of California in favor of states where rent, taxes, and labor laws are perceived as more conducive to sustainable growth.

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California’s Historical Role in Retail

California has long been considered a laboratory for American consumer culture. From the postwar suburban boom through the rise of tech-driven convenience, retailers often viewed the state as a proving ground for emerging business models. Malls in Orange County, lifestyle centers in Silicon Valley, and big-box retail strips in Southern California once epitomized the American shopping experience.

For Bed Bath & Beyond, its California stores were not only among the busiest in the country but also often served as flagship locations pioneering store layouts and product trends. Exiting the state sends a symbolic message about how drastically the retail landscape has changed, both for California and nationwide.

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Economic and Employment Impact

The decision to permanently rule out California underscores broader concerns about job creation and revenue streams in a state heavily reliant on retail as one of its largest employment sectors. At its peak, Bed Bath & Beyond employed thousands of Californians across frontline retail, distribution, and corporate roles.

While those positions were already gutted during the retailer’s bankruptcy and closures, the lack of revival efforts means communities that once depended on these jobs will not see their return. For local shopping centers still struggling with post-pandemic foot traffic, the absence of a revived Bed Bath & Beyond removes a potential anchor tenant that could have contributed to revitalization efforts.

On a statewide scale, California’s economy remains resilient, with GDP rankings among the highest globally. However, small to mid-sized retailers have consistently reported difficulty staying profitable in the face of mounting costs. Bed Bath & Beyond’s decision joins a growing list of examples highlighting how conditions may be deterring corporate reinvestment.

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The Broader Debate: Business Climate in California

California officials have long defended the state’s regulatory framework as a necessary balance to protect workers, consumers, and the environment. Supporters argue that California’s innovation economy, highly skilled workforce, and affluent consumer base offer unmatched opportunities for companies willing to adapt.

However, critics point to a steady stream of corporate relocations — both within the retail sector and beyond — as evidence that costs and restrictions have reached unsustainable levels. High-profile moves in recent years include several Fortune 500 companies shifting headquarters to states like Texas, Florida, or Tennessee.

Bed Bath & Beyond’s decision may not carry the same weight as those of tech or aerospace giants, but it reflects the growing complexity of California’s economic narrative.

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Public Reaction and Consumer Impact

Consumers in California have voiced mixed emotions. Some lament the loss of a familiar shopping destination that had become synonymous with college dorm move-ins, wedding registries, and seasonal home makeovers. Social media posts reflected nostalgia, with many recalling their reliance on Bed Bath & Beyond’s signature coupon-driven promotions.

Others have taken a more pragmatic view, noting that the rise of online shopping has largely filled the void. With free shipping, targeted pricing, and the convenience of delivery, e-commerce has rendered big-box shopping less essential. Still, for the state’s many suburban communities, the absence of in-store options remains a lingering frustration.

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Looking Ahead for Bed Bath & Beyond

Although California is now permanently off the retailer’s roadmap, Bed Bath & Beyond’s broader vision remains focused on establishing a leaner, digitally integrated, customer-focused model. Lemonis has emphasized omnichannel development, smaller footprint stores, and curated product assortments designed to win back relevance in a crowded market.

The company’s revival, though still in early stages, presents a chance to recapture parts of its once-dominant reputation. By avoiding costly markets and doubling down on efficiency, investors hope to create a business that can better weather the retail sector’s rapid transformations.

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Conclusion

Marcus Lemonis’ unequivocal statement marks a clear shift in Bed Bath & Beyond’s strategy and sparks renewed attention on California’s competitive challenges. Once a core market for the retailer, the Golden State’s costs and regulatory complexities have now placed it firmly off the map.

For California consumers, the announcement closes the chapter on a familiar retail era. For business leaders and policymakers, it underscores the tension between upholding progressive standards and ensuring the state remains attractive for both established corporations and new ventures.

Whether Bed Bath & Beyond’s decision proves to be a singular retail story or yet another sign of a larger trend away from California remains a central point of debate.

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