Bed Bath & Beyond is adding at least 12 new stores this year and converting nearly 100 Container Store locations into dual-branded shops across 33 states, but not a single one will open in California. Beyond Inc CEO Marcus Lemonis made the exclusion explicit, calling the state "one of the most over-regulated, expensive, and risky environments for businesses in America."
The retailer's return from Chapter 11 bankruptcy in 2023 has been one of the more unlikely stories in American retail. And the decision to freeze out the nation's most populous state, home to roughly one in eight Americans, tells you something about how at least one CEO weighs the cost of doing business under Sacramento's regulatory regime.
Gov. Gavin Newsom's press office didn't let the slight pass. In a post on X, the office dismissed the brand entirely: "After their bankruptcy and closure of every store, like most Americans, we thought Bed Bath & Beyond no longer existed." The post added, "We wish them well in their efforts to become relevant again as they try to open a 2nd store."
That response captures something familiar about California's political leadership: when a company says the state's business climate drove it away, Sacramento's reflex is mockery rather than reflection.
The comeback plan hinges on a $150 million deal for Beyond Inc to buy and merge with The Container Store, a transaction expected to close this summer. Earlier in April, the two companies reached the agreement, and The Container Store launched a "Store Changing" event at all of its locations around the country on April 24.
Most of the event involves resetting selling floors to make room for Bed Bath & Beyond merchandise. A company news release stated that the firm "will liquidate approximately 30% of select categories and SKUs beginning Friday to streamline assortments, improve space productivity and create room for new products expected to arrive in phases later this year." The release called the initiative "a planned step in reimagining the combined in-store experience."
Starting in May, several Container Store locations will transition completely to "The Container Store + Bed Bath & Beyond." Over the coming months, 98 stores across 33 states will carry the dual branding. The company has set a target goal of 300 stores, with new locations rolling out throughout the year.
The trend of bankrupt retailers returning through creative store partnerships has become a recurring theme in American retail. But the California exclusion sets this comeback apart.
As part of the broader reset event, stores opened one hour early on April 25 and 26, with early arrivals receiving an additional 5% discount on purchases.
Marcus Lemonis did not mince words. In a statement reported last year, the Beyond Inc CEO laid out his reasoning in blunt terms:
"This decision isn't about politics, it's about reality. California has created one of the most over-regulated, expensive, and risky environments for businesses in America."
He went further, describing what he sees as a system stacked against employers and consumers alike:
"It's a system that makes it harder to employ people, harder to keep doors open, and harder to deliver value to customers. The result? Higher taxes, higher fees, higher wages that many businesses simply cannot sustain, and endless regulations that strangle growth."
Lemonis also took aim at Sacramento's fiscal posture, arguing that even apparent surpluses mask deeper problems. "Even when the state announces a budget surplus, it's built on the backs of ordinary citizens who are paying too much and businesses who are squeezed until they break," he said, calling it a "system that undermines both customers and shareholders."
His closing line carried the tone of a manifesto: "We're taking a stand because it's time for common sense."
Lemonis discussed the reopening strategy and the California exclusion publicly, making clear this was not a quiet logistics decision but a deliberate message.
California customers won't be entirely shut out. Lemonis said they would still have access to Bed Bath & Beyond merchandise through the website and delivery options, including standard delivery, 24-to-48-hour delivery, and same-day delivery in some situations.
The Bed Bath & Beyond revival began before the Container Store deal. It first took shape with a $10 million acquisition of Kirkland's Home, now called The Brand House Collective, in September 2025, as part of a seven-year collaboration agreement to bring back brick-and-mortar stores and improve e-commerce.
That deal signaled Beyond Inc's intent to rebuild the brand through partnerships rather than standalone buildouts. The Container Store merger dramatically accelerated the timeline, giving the company access to 98 existing retail locations it can rebrand without starting from scratch.
The strategy stands in contrast to other retailers that have abruptly shuttered locations, leaving vendors and employees with little warning. Beyond Inc appears to be betting that the Bed Bath & Beyond name still carries consumer recognition, and that physical retail still matters in the right markets.
Whether 300 stores is a realistic target remains an open question. The company has not disclosed which specific cities or shopping centers will host the new locations beyond the broad 33-state footprint. And the Container Store's own financial recovery adds a layer of uncertainty to the merger's long-term prospects.
Newsom's press office chose to answer Lemonis with a jab about relevance. The post implied that a company emerging from bankruptcy has no standing to criticize the state's regulatory environment.
But the dismissal sidesteps the substance of Lemonis' complaint. He didn't argue that Bed Bath & Beyond failed because of California. He argued that the cost of operating in the state, taxes, fees, wages, and regulation, makes it irrational to open new stores there when 33 other states offer a better deal.
That calculation is not unique to one home-goods retailer. California has watched a steady stream of companies relocate headquarters, shift operations, or simply decline to expand within its borders. The governor's office can mock one CEO, but the pattern is harder to laugh off.
The reshaping of retail spaces across American markets is being driven in part by exactly the regulatory and cost pressures Lemonis described. When businesses weigh where to put their next dollar, states that make it easier tend to win.
Several details remain unclear. The company has not identified which specific California locations were considered and rejected, nor which of the 98 dual-branded stores will open first. The exact timeline for reaching 300 stores has not been disclosed. And the $150 million Container Store deal still needs to close, a process expected to wrap up this summer but not yet finalized.
For California shoppers, the practical impact is limited. They can still order online. But for the state's political class, the message is harder to ignore: a company with a nationally recognized brand, a fresh infusion of capital, and a plan to open hundreds of stores looked at California and said no thanks.
When a governor's office responds to that kind of rejection with sarcasm instead of self-examination, it tells you everything about why the rejection happened in the first place.