(FORTUNE Magazine) – BED BATH & BEYOND The much maligned middle manager may finally have found a home at Bed Bath & Beyond. The household goods chain offers shoppers a cornucopia of high- quality, bargain-priced towels, linens, dinnerware, and other goods at 38 stores. But what it offers managers is just as good for business: the chance to run their own stores without interference from the top. Keeping Bed Bath & Beyond decentralized helps. Forget warehouses: The giant stores are stocked floor to ceiling with 20,000 different items. This cuts overhead and makes for a dramatic retail space, but it also lets managers control their own merchandise, which they order directly from manufacturers. When a store manager has a marketing idea, he need only check with a district manager before giving it his best shot. Three years ago one manager felt that glassware might sell better if it were displayed out of the box, letting shoppers buy glasses individually instead of in sets. After a trial run showed sales up 30%, the policy was adopted nationwide. Store managers are free to cut prices to match local competitors'. Such initiative requires myriad approvals at other stores. Says Shearson Lehman Brothers analyst Heidi Steinberg: ''Management is excellent at instilling the entrepreneurial spirit.'' That spirit reigns at corporate headquarters too -- both of them. Co-CEO Warren Eisenberg oversees administrative work out of a store in Springfield, New Jersey, while his colleague, Leonard Feinstein, looks after buying from a Huntington Station, New York, store. Both gloat that there are no vice presidents and that everyone gathers on the floor on Saturdays to tidy merchandise, help carry shoppers' packages, and pick up bits of litter. All this would be for naught if Bed Bath & Beyond's prices weren't so low. By eliminating special sales and sticking to everyday low prices, it consistently undercuts the competition. In November the company added four superstores, and analyst Steinberg expects eight more next year. That, says she, should help fiscal 1993 profits rise 29% to $15.4 million on a 22% increase in sales, to $205 million. The stock traded recently at $28.75, or 32 times her earnings per share estimate for fiscal 1993.

EQUITRAC Almost everyone complains about high-priced attorneys. Not Equitrac CEO George Wilson: ''You'll never hear us saying anything bad about the law profession.'' That's because his company makes devices that enable law firms to monitor the use of photocopiers, faxes, and computers by individual lawyers. The firms can then pass on the cost of paper, toner, or general wear and tear to clients as so-called bill-backs. Pocket change? Hardly. Such billings come to 11% of revenues at some law firms. The Coral Gables, Florida, company says it has installed monitoring systems in 65% of the 500 largest legal practices. The system costs about $20,000 for a firm with 20 attorneys. Equitrac is also marketing it to other professionals -- engineers, architects, and accountants -- who use bill-back arrangements. Expanding beyond the law should help net income climb 49% in fiscal 1993 to $2.6 million on a 14% rise in sales, to $27 million, says analyst Jeffrey A. Newman of Raymond James & Associates. BellSouth recently became a customer: By carefully monitoring its photocopying, it hopes to reduce costs $3 million a year. Equitrac stock recently traded at $11, or 15 times what Newman forecasts for fiscal 1993 earnings per share.

GRIST MILL The value decade is upon us and consumer loyalty to high-priced brands grows more tenuous by the day. Grist Mill of Lakeville, Minnesota, makes private- label granola bars, cereal, fruit snacks, and pie crusts for supermarket chains like A&P, Kroger, and Pathmark that lure consumers with low prices. Part of Grist Mill's success comes from making sure that its knockoffs are as tasty as the brand names. And packaging must be sharp enough to draw shoppers' eyes. Says CEO Ronald K. Zuckerman: ''Since we don't spend a lot of money advertising, our one shot is grabbing the consumer as he walks by.'' To that end, Grist Mill uses a mix of in-house and outside designers to keep its 400 labels eye-catching. Analyst Stephen Carnes of Piper Jaffray expects fiscal 1993 net income to grow 19% to $4.4 million on a 15% increase in sales to $76 million. The stock traded recently at $16.25, or 17 times his estimate of fiscal 1993 earnings per share. Grist Mill also markets its own line of products for supermarkets that have no private labels. Generally these cost 20% less than comparable brand names. One of its confections -- the Medley candy bar -- is a tour de force of value strategy: At about half the size of normal candy bars, it costs just 25 cents, vs. the usual price of 65 cents, appealing to the thrifty and calorie-minded alike.