Bed Bath & Beyond (BBBY) has agreed to sell its intellectual property to Overstock.com (OSTK) for $21.5 million, according to a document filed Thursday in Bed Bath’s Chapter 11 bankruptcy filing .
Overstock will pay for Bed Bath & Beyond’s brand name, business data and digital assets. The move comes nearly two months after Bed Bath & Beyond filed for Chapter 11 bankruptcy protection after years of declining sales doomed the homewares retailer.
Bed Bath’s physical retail stores are not scheduled to remain open under the agreement.
Shares of Overstock soared nearly 10% in premarket trading on Thursday following the news.
Bed Bath baby products retail chain Buy Buy Baby is not included in the Overstock.com listing. Insolvency proceedings are planned for his assets on Wednesday.
A hearing in the United States Bankruptcy Court for the District of New Jersey is scheduled for Tuesday at which the parties are expected to seek approval of the deal.
Bed Bath & Beyond (BBBY) hedged as it filed for Chapter 11 protection in April while seeking resolution while struggling to stay in business.
NEW YORK, NEW YORK – APRIL 24: A poster is displayed at a closed Bed Bath & Beyond store on April 24, 2023 in New York City. Bed Bath & Beyond filed for bankruptcy protection after the ailing company failed to secure enough foundations to stay open. (Photo by Leonardo Munoz/VIEWpress)
A Chapter 11 filing typically helps financially troubled companies work out a plan with their creditors to work out their debt and become a viable entity. But Bed Bath & Beyond announced that it would focus on liquidating assets, a path typically pursued as part of a Chapter 7 bankruptcy.
The $21.5 million for portions of Bed Bath & Beyond’s business is a far cry from the company’s historical market cap of more than $16 billion in 2013. After peaking at $12.3 billion in In 2017, the retailer’s sales have plummeted in recent years. In 2021, total sales were just $7.9 billion, the lowest annual figure since 2009. Through the first three quarters of 2022, the company was on track to return sales in line with reported levels in the mid-2000s had.
While private label has become an increasingly important part of the growth story for Target (TGT), Macy’s (M), Walmart (WMT) and other major retailers, Bed Bath & Beyond has fallen behind. The company’s demise has only been accelerated by the pandemic as shoppers flock to online retailers like Amazon (AMZN) and Wayfair (W).
The story goes on
JOWA Brands has been selected as a replacement bidder solely for intellectual property related to Bed Bath’s own brand Wamsutta bed linen and towels.
Ten Twenty Four has been selected as a replacement bidder for Bed Bath’s Beyond.com domain only. The company, which does business as Beyond Pricing, designs and develops pricing software to maximize revenue for hosts and vacation property owners.
Click here for the latest stock market news and in-depth analysis, including stock moving events
Read the latest financial and business news from Yahoo Finance