California has just taken another major hit to its business reputation. A well-known national retailer has decided not to open or operate stores in the state, citing sky-high costs and what executives described as a hostile environment for companies.
The announcement came Wednesday, when the company’s executive chairman took to social media to explain the decision. His reasoning was blunt: California, he said, has created “one of the most overregulated, expensive, and risky environments for businesses in America.”
He went on to point to a perfect storm of higher taxes, wage mandates, endless fees, and regulations that “strangle growth” as factors that made doing business in the Golden State impossible. Instead of investing in physical stores across California, the company will now focus on serving customers through its online platform. According to leadership, shoppers in the state can still expect 24–48 hour delivery, with same-day service available in some areas — but there will be no brick-and-mortar presence.
For critics of Governor Gavin Newsom’s policies, the announcement is just the latest evidence that businesses of all sizes — from mom-and-pop shops to global corporations — are finding it increasingly difficult to survive in California. They argue that the state’s budget surpluses are being built at the expense of ordinary taxpayers and companies “squeezed until they break.”
The identity of the company was confirmed later in the day: Bed Bath & Beyond. The once-iconic home goods chain, which collapsed into bankruptcy in 2023, has been trying to stage a dramatic comeback.
After years of mismanagement, shifting consumer habits, and mounting debt, the retailer filed for Chapter 11 in April 2023, shuttering all of its physical locations. That summer, Overstock.com swooped in, purchasing the company’s brand name and digital assets for $21.5 million. Overstock later rebranded itself under the Bed Bath & Beyond name, relaunching the retailer online and setting the stage for a second life.
In recent months, the revived company has begun experimenting with smaller-format neighborhood stores, opening its first new Bed Bath & Beyond Home location in Nashville, Tennessee. The goal, executives say, is to keep the recognizable brand while avoiding the bloated costs and massive store footprints that doomed the chain before.
But if Californians were hoping to see those new neighborhood stores in their state, the announcement this week slammed the door shut. Executives said plainly that California’s cost structure is unsustainable, and that it would be irresponsible to expose shareholders and customers to those risks.
The news quickly sparked a political reaction. Governor Gavin Newsom’s press office took to X (formerly Twitter) with a mocking response, dismissing the announcement as nothing more than excuses from a struggling retailer. Rather than express concern about the message the departure might send to other companies, the governor’s office chose to mock the decision.
That response only fueled criticism from business advocates, who argue that state leadership is in denial about the exodus of employers and investment. In recent years, California has seen an outflow of restaurants, tech companies, and manufacturers citing similar concerns about regulation, costs, and crime.
Supporters of Newsom counter that the companies leaving are often ones already facing financial trouble, and they argue California continues to attract innovation and high-value industries. But for many small and mid-size businesses — and now one of the country’s most recognizable retail brands — the math simply doesn’t add up.
The bigger question is whether California can continue to shrug off these departures as isolated incidents, or whether the trend will eventually erode its economic strength. For Bed Bath & Beyond, the focus is now squarely on e-commerce and selective re-entry into markets more welcoming to physical retail. For Newsom, the optics of mocking another departing company may only deepen perceptions that his administration is out of touch with the concerns of business owners.
Either way, California consumers will still be able to order their towels and kitchenware online. But they won’t be browsing Bed Bath & Beyond aisles in the Golden State anytime soon.
