Bankrupt retailer Bed, Bath and Beyond has been snapped up at auction for $21.5 million — in a deal that will close all of its stores and leave the brand alive in name only.
By exposed court documents Thursday’s purchase comes a week after the e-commerce company filed for Chapter 11 — in an effort to reorganize its assets and pledge them to the highest bidder.
The buyer, dot-com juggernaut Overstock.com, has already liquidated at least 18 failed companies at prices lower than the wholesaler, and now owns the rights to the retailer’s name — as well as its intellectual property and all of its assets.
It’s a stark fall from grace for a brand once worth more than $17 billion, and the latest example of investment companies scooping up recognizable assets for dirt-cheap prices.
The strategy has been implemented on other failed matches, such as Toy ‘R’ Us and Radio Shack, and is generally performed with the goal of reviving them, usually online.
Bankrupt retailer Bed, Bath and Beyond has been snapped up at auction for $21.5 million — in a deal that will see all of its stores close and the brand live on in name only. The entrance to an Anchorage store can be seen on the day the retail giant filed for Chapter 11 in April
The buyer, dot-com juggernaut Overstock.com now owns all rights to the retailer’s name — and has already liquidated at least 19 bankrupt companies at lower wholesale prices
The latest example of investment firms boasting recognizable assets, it’s a stark fall from grace for the big box brand – once worth more than $17 billion
There will be a hearing next Tuesday to finalize the purchase – after which the brand’s 360 remaining retail locations will close for good.
As for the 30,000 who employed them, they will now lose their jobs.
Shares of Overstock, meanwhile, skyrocketed in pre-market trading Thursday following the news — now trading at six percent above Wednesday’s close.
The buyout is somewhat typical of an e-commerce company, that initially started with a model of exclusively selling surplus and returned goods online, as it emerged from the dotcom boom of the late 1990s.
The company eventually expanded its model to include first-party products and handmade goods produced by Overstock workers in developing countries, and today is worth about $1 billion.
The company also manages stock inventory for other retailers, though Bed Bath and Beyond will now bring some much-needed brand awareness to its sprawling inventory.
Particularly the company last year narrowed its focus from more general merchandise to selling only furniture and related household items.
In fact, this year marks the first time as an online home seller – with the purchase of Bed, Bath and Beyond demonstrating commitment to this new model.
Shares of Overstock, meanwhile, skyrocketed in pre-market trading Thursday following the news — now trading at six percent above Wednesday’s close
The strategy has been implemented on other failed matches, such as Toy ‘R’ Us and Radio Shack, and is generally performed with the goal of reviving them, usually online.
The e-commerce discounter was selected as a stalking horse bidder for Bed Bath’s bankruptcy auction earlier this month, a court describing the bankruptcy proceedings revealed on Thursday.
JOWA Brands – a women’s boutique that sells clothes and accessories from independent designers in South Korea – was selected as a reserve bidder exclusively for Bed Bath’s Wamsutta brand, a retailer-owned private label for sheets and towels.
Ten Twenty Four, a software company that helps owners maximize vacation rental income and does business as Beyond Pricing, was chosen as the reserve bidder for the Beyond.com company.
In a rare move, Bed Bath chose to conduct a separate sales process for its Buy Buy Baby chain, which has 120 stores in the U.S. and is considered one of the company’s most sought-after assets.
The separate process allows Bed, Bath, and Beyond to wait and find another bidder willing to keep those stores open, all without taking over company assets.
The big box chain is just the latest, but not the last physical victim of what experts are calling a “retail apocalypse,” and its downfall is one of the most pervasive in recent memory given its preeminence in the American landscape.
The company was founded in 1971 in Springfield, New Jersey, and has since become ubiquitous in the US home goods market.
However, the closure signals a broader trend sweeping the US – the long-awaited disappearance of physical stores as online giants like Amazon continue to gain strength.
UBS warned earlier this year that 50,000 stores would close by 2027 as online dominance grows.
“The pace of store closures will accelerate due to the combination of a slowdown in consumer spending, a reduction in credit availability and an increase in e-commerce penetration,” analyst Michael Lasser said in the report obtained by DailyMail. com.
The sale is part of a broader trend sweeping the US – the long-awaited disappearance of brick-and-mortar stores as online giants like Amazon go from strength to strength
UBS has increased its predicted store closures from 40,000 to 50,000 by 2027.
The analysts point to the other brands that have closed stores in the US since 2021 as evidence of the ongoing corrosion.
In November 2021, CVS announced it would close 900 of its stores — about 10 percent of the total.
Foot Locker recently announced 545 additional closures, while Tailored Brands announced last year it would close 500.
Among the driving factors behind the closures are a slowdown in consumer spending and rising costs of operating stores.
Bed, Bath & Beyond fell through the shelves, unable to compete with the reduced offerings of rivals like TJ Maxx and Target’s value ranges, and with their products not seen as little luxuries worth paying more for. pay,” said Susannah Streeter, head of money and markets at Hargreaves Lansdow.
Now analysts warn that the only stores that have a chance to compete with Amazon and Wayfair are those that invest in their online infrastructure.
Walmart, for example, is investing heavily in its online presence, as it is also closing several stores, and can afford to absorb the higher operating costs that are pushing independent businesses to their knees.
Bank of America analysts named Walmart Inc, Amazon.com Inc, Target, Wayfair, and Williams-Sonoma Inc as the companies seeking revenue from Bed Bath & Beyond’s bankruptcy.
However, the sale still needs to be approved in a hearing on Tuesday, while an auction for Buy Buy Baby’s assets is scheduled for Wednesday.