Bed Bath & Beyond Ditches California Stores, Citing Overregulation and High Costs; Newsom's Office Gives Childish Response

Bed Bath & Beyond's Executive Chairman Marcus Lemonis declared the company will close all retail operations in California, labeling the state's business climate as "overregulated, expensive, and risky." The move adds to a growing exodus of firms fleeing Governor Gavin Newsom's policies, which Lemonis stressed is "not about politics—it's about reality."

In a statement posted on X, Lemonis explained the decision prioritizes the company's viability, employees, and customers over operating in an environment that hinders success. While online shipping to California customers continues, physical stores will shutter, eliminating jobs and tax revenue in a state already grappling with departures.

Newsom's press office responded with a dismissive quip: "We thought Bed, Bath, and Beyond no longer existed." The remark, captured in a screengrab before potential deletion, underscores the administration's combative stance amid mounting criticism of its regulatory burdens.

This announcement echoes a pattern of businesses abandoning California due to soaring operational costs, stringent environmental rules, high taxes, and bureaucratic hurdles that stifle growth. Since 2020, over 190 companies have relocated headquarters or major operations out of state, with 54% heading to Texas for its business-friendly climate.

Notable exits include Tesla, which moved to Austin in 2021 citing regulatory overreach and high living costs; Chevron, shifting to Houston in 2024 amid disputes over California's aggressive climate policies; and Oracle, relocating to Austin in 2020 to escape escalating expenses. McKesson Corp left for Texas in 2023, blaming tax burdens, while Charles Schwab followed suit in 2019, expanding in Dallas for lower costs. Hewlett Packard Enterprise departed for Houston in 2020, and CBRE consolidated in Dallas in 2022, both highlighting California's uncompetitive edge.

These relocations have drained billions in economic activity, with California's nonfarm job growth lagging the national average at 1.4% versus 2.1% in 2024, per Bureau of Labor Statistics data. Critics point to Newsom's initiatives—like expanded labor mandates and environmental regulations—as accelerating the flight, turning the Golden State into a cautionary tale for entrepreneurs.

As Bed Bath & Beyond joins the outflow, California's leadership faces intensifying pressure to reform, lest more firms deem the risks too great to stay.