Bed Bath & Beyond (NASDAQ:BBBY) is getting serious about cutting costs. This week, the specialty retailer announced plans to reduce its store footprint in the wake of slumping sales and ballooning net losses.

The chain expects to close about 200 locations over the next two years, management revealed on Wednesday, as the biggest part of a restructuring move aimed at reducing annual costs by between $250 million and $350 million.

Most of the cuts will come from its core Bed Bath & Beyond franchise, which currently operates 955 locations across the U.S. and Canada.

A couple shop together in a mall.

Image source: Getty Images.

The retailer is hoping a more digital focus will allow it to continue serving strong demand for home furnishings and appliances without the burden of a massive store network to maintain and staff. E-commerce sales jumped 82% in the most recent quarter, which was heavily impacted by COVID-19 social distancing efforts.

CEO Mark Tritton expressed optimism that the lower cost burden will help the company return to steady sales growth and stable earnings -- in part by capturing digital sales growth. "We are encouraged by early customer response [to reopenings]," he said in a press release, "including continued strong demand, in excess of 80%, across our digital channels during the month of June."