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SALT LAKE CITY — After filing for Chapter 11 bankruptcy protection in April, once-powerful US retailer Bed, Bath & Beyond is being auctioned off in liquidation auctions, and Utah-based online giant Overstock.com is poised to take on the branding, spiritual Property and other assets to secure the chain. However, the brick-and-mortar stores aren’t part of the deal.
Overstock made a $21.5 million low-ball “stalking horse” bid last week and according to the Washington Post; Bed Bath & Beyond confirmed on Thursday that it had accepted the offer. If a New Jersey bankruptcy court grants approval at a hearing next week, Overstock will acquire the Bed, Bath & Beyond brand name, business data and digital assets. Physical stores are not part of the deal. At its peak, Bed, Bath & Beyond operated over 1,500 stores, but by early May it was down to around 350 stores.
In response to a request from Deseret News, Overstock.com declined comment pending the closing of the deal. At the end of regular trading on Thursday, shares of Overstock are up over 17% for the day.
Bed, Bath & Beyond’s value has been on a downtrend since the stock hit a high of around $81 per share in early 2014. In April of this year, the share price had fallen to just a few cents per share. Analysts have pointed to a variety of missteps by the company’s executives, including a failed switch from third-party to branded products and a massive share buyback program.
While Overstock will seek opportunities to use Bed, Bath & Beyond’s intangible assets after the transaction closes, Bed, Bath & Beyond is seeking a separate path to liquidate its Buy Buy Baby brand division, which includes and is believed to have approximately 120 stores becomes the company’s most valuable remaining asset. According to CNBC, Buy Buy Baby’s assets will be auctioned next Wednesday.
According to The Associated Press, Bed, Bath & Beyond announced last August that it would close stores and lay off workers in an effort to get the ailing business back on track. The company closed about 150 of its namesake stores and reduced the workforce by 20%. It was estimated that these cuts would save the company $250 million in its current fiscal year. In August, it also said it had raised more than $500 million in new financing.
The company was in an ongoing sales slump and announced back in August that it would return to its original strategy of focusing on national brands rather than pushing its own store brands.
It reversed a strategy of former CEO Mark Tritton, who was fired last June after less than three years at the helm, according to the AP. The company said it will phase out a third of its private label less than a year after launch.
Following a dismal financial report released in January, Bed Bath & Beyond’s current president and CEO Sue Gove said the company was struggling to stockpile sufficient inventory due to credit issues with suppliers and despite the spate of dismal financial news it believed at the time they still have a chance to save the company.
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