After filing for Chapter 11 bankruptcy in April, the once-powerful American retailer Bed, Bath & Beyond is now undergoing liquidation auctions.
It appears that the Utah-based online giant Overstock.com is poised to acquire the company’s branding, intellectual property, and other assets. However, the deal does not include the brick-and-mortar stores.
Last week, Overstock submitted a low initial bid of $21.5 million, commonly known as a “stalking horse” bid. According to The Washington Post, Bed Bath & Beyond confirmed on Thursday that it had accepted the offer.
The acquisition of Bed, Bath & Beyond’s brand name, business data, and digital assets by Overstock is subject to approval by a New Jersey bankruptcy court, with a hearing scheduled for next week.
It is important to note that the physical stores are not part of the agreement. At its peak, Bed, Bath & Beyond operated more than 1,500 stores, but as of early May, it had reduced that number to around 350 locations.
In response to an inquiry from the Deseret News, Overstock.com declined to comment until the deal is finalized. On Thursday, at the close of regular trading, Overstock’s shares had risen more than 17% for the day.
The value of Bed, Bath & Beyond has steadily declined since its stock reached a peak price of approximately $81 per share in early 2014. By April of this year, the stock price had plummeted to just a few cents per share.
Analysts have attributed this decline to various missteps by the company’s executives, such as a failed transition from third-party products to store-branded goods and a large-scale stock buyback program.
While Overstock plans to capitalize on Bed, Bath & Beyond’s intangible assets once the deal is completed, Bed, Bath & Beyond is pursuing a separate path to liquidate its Buy Buy Baby division, which includes approximately 120 stores and is considered the most valuable remaining asset of the company. According to CNBC, the assets of Buy Buy Baby will be up for auction next Wednesday.
In an effort to revive its struggling business, Bed, Bath & Beyond announced last August that it would close stores and lay off employees. The Associated Press reported that about 150 of its namesake stores were shuttered, and the workforce was reduced by 20%.
The company estimated that these measures would result in savings of $250 million in the current fiscal year. In addition, it secured over $500 million in new financing.
Online Giant Secured Bed, Bath & Beyond’s Brand
In August, the company also abandoned its shift towards promoting its own store labels and returned to its original strategy of focusing on national brands.
This marked a reversal of the approach introduced by its former CEO, Mark Tritton, who was ousted in June of the previous year after less than three years in the position.
Less than a year after their introduction, Bed, Bath & Beyond announced that it would eliminate one-third of its store brands.
After issuing a disappointing financial report in January, Sue Gove, the current president and CEO of Bed Bath & Beyond, acknowledged that the company had faced challenges in maintaining sufficient inventory due to credit issues with vendors.
Despite the bleak financial news, Gove expressed optimism at the time, believing that there was still a chance to salvage the business.
The once-mighty retailer Bed, Bath & Beyond finds itself in the midst of a challenging period, as it undergoes Chapter 11 bankruptcy proceedings and liquidation auctions.
The company’s decline, marked by a plummeting stock price and a series of strategic missteps, has led to the sale of its branding, intellectual property, and digital assets to online giant Overstock.com.
However, the deal does not include Bed, Bath & Beyond’s physical stores, which have played a significant role in its retail presence.
While Overstock.com aims to capitalize on the intangible assets acquired from Bed, Bath & Beyond, the company itself is pursuing separate avenues to liquidate its Buy Buy Baby division, viewed as the most valuable remaining asset.
