Newsom, SJ mayor react differently to Bed Bath & Beyond announcement
Mahan, Newsom split on how best to enhance California business climate
Mayor Matt Mahan, (D) San Jose, clashed with Golden State Gov. Gavin Newsom over criticism California should do more to recruit and retain businesses. The rift was in reaction to an announcement by the CEO of Bed, Bath & Beyond that the resurrected company would not open any stores in California.
SAN JOSE, Calif. - Bed Bath & Beyond – the home furnishings retailer that filed for bankruptcy in 2023 and then shortly after closed all 360 of its stores – came out with some harsh words against the State of California on Wednesday. But the reaction from some Golden State politicians is quite varied.
Not doing business in the Golden State
What we know:
The statement, put out today by the retailer's CEO Marcus Lemonis simply says the company "will not open or operate retail stores in California."
Given the company's financial status, you may find that statement perplexing. We reported earlier this month that the company has rebranded stores as Bed Bath & Beyond Home. The company itself is under a new name, Brand House Collective Inc.
While you can still shop for the brand online, its first rebranded store location has already opened as they focus on the Nashville area market. When Bed Bath and Beyond filed for bankruptcy, Overstock bought its intellectual property assets, which preserved the store's online presence.
The CEO's statement
Lemonis said his decision for the company is not about politics, but rather about reality.
"California has created one of the most overregulated, expensive, and risky environments for business in America. It's a system that makes it harder to employ people, harder to keep doors open, and harder to deliver value to customers," Lemonis said.
FILE - A Bed Bath & Beyond sign hangs outside the store on June 29, 2022 in Miami, Fla. (Joe Raedle/Getty Images)
He continued to say the result has been higher taxes and higher wages that many businesses cannot sustain and that the state's "endless regulations" strangle growth.
"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.
The CEO said as for California, they will focus on delivery service and plugged the company's online store, adding, "but without the inflated costs created by an unsustainable model."
He claimed that businesses deserve a chance to succeed and that, "Employees deserve jobs that last and customers deserve fair prices."
Newsom and SJ mayor react
San Jose Mayor Matt Mahan had more of a concerned reaction on social media than the governor's clap back from his X.com account.
"This is serious," Mahan said. "We are shooting ourselves in the foot and we need to acknowledge that. San Jose is open for business, we're doing everything we can to make it easier for our employers to succeed."
He said he hopes the rest of California follows suit, as in cities following San Jose's footsteps to promote themselves as business-friendly.
He closed his reaction post with the line: "Looking forward to seeing how our gubernatorial candidates respond to issues like this."
The other side:
The governor, who will be termed out by the next election, did not disappoint in sharing a reaction. He didn't seem all too bothered by the home furnishing company's statement. He simply posted: "The company that already went bankrupt and closed every store across the country two years ago? Ok."
Ouch.
Political drama
But in reality, this BBB development may have exposed a rift between democrats, at least between Newsom and Mayor Mahan.
Mahan followed up by saying with 1 million Californians out of work that he wished the Governor's Office would spend more time implementing Prop. 36 (state law on penalties for theft and drug trafficking) and other reforms rather than "trolling employers."
Not to give the South Bay mayor the final word, Izzy Gardon, the director of communications for Gov. Newsom, shot back that BBB was simply seeking attention and free publicity and that the mayor fell for it.
He then added this line that contained a perhaps brutal truth regarding San Jose: "We know bashing CA is fun. But quick reminder: your city ranks 99th out of 100 for business climate. Perhaps focus on that before pointing the finger elsewhere?"
He even included a screenshot of a KTVU article from last May with the line, "Out of the 100 large cities, San Jose ranked 99th, only behind Washington D.C., in the overall ranking of best to worst large cities to start a business," as if to show the receipts.
Brutal indeed.