Overstock to buy Bed Bath & Beyond’s intellectual property assets
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Overstock.com will acquire Bed Bath & Beyond’s intellectual property and other digital assets for $21.5 million, in line with its original bid for the bankrupt retailer’s assets, according to court documents filed Thursday. Wp Get the full experience. Choose your plan ArrowRight The deal — which covers Bed Bath & Beyond’s brand name, business data and digital assets but excludes its brick-and-mortar stores — must still be approved by New Jersey’s bankruptcy court at a hearing on Tuesday. Overstock, based in Midvale, Utah, sells furniture and home decor at discount prices.
Additionally, two backup bidders were selected for specific brands: JOWA Brands for Bed Bath & Beyond’s Wamsutta brand, and Ten Twenty Four for Beyond.com. Buy Buy Baby, an infant-goods retailer owned by Bed Bath & Beyond, will be auctioned separately on June 28, CNBC reported.
Bed Bath & Beyond confirmed in a statement Thursday that Overstock was selected as the winning bidder. Overstock declined to comment until the deal is final.
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In late April, the troubled chain filed for Chapter 11 bankruptcy amid plunging sales, a tanking share price and competition from retailers offering their own home goods, including Wayfair, Amazon and Target. (Amazon founder Jeff Bezos owns The Washington Post. Interim CEO Patty Stonesifer sits on Amazon’s board.)
Its downfall was also marked by missteps, such as a $1 billion stock buyback in 2021 that left the company short on cash.
In January, it reported a $393 million quarterly loss that pushed fiscal year-to-date losses to more than $1.1 billion. Later that month, it said that it would be unable to pay back a $550 million loan from JPMorgan and another $375 million from Sixth Street. At that point, it had already shuttered 150 stores and planned to close dozens more.
But more fundamentally, the 52-year-old retailer’s decline can be traced to its fading relevance to consumers, according to analysts.
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Overstock in April reported a net loss of $10 million in the first quarter of 2023. At the time, Overstock CEO Jonathan Johnson insisted the company still had a strong cash position “to deploy new strategies to drive growth” despite an “uncertain” economic and consumer environment. He added the company would lean into its core brand value of “quality and style for less.”
Alex Arnold, managing director of Odeon Capital Group, said the proposed purchase represented “the deal of the century for Overstock,” noting that Bed Bath & Beyond’s online business generated revenue far in excess of Overstock’s bid. With the acquisition, the online retailer will inherit a decades-old brand with widespread name recognition, he said.
“They’ve got a great opportunity,” he said, adding that the Overstock’s success with the brand hinges on how well it executes it.
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Source: The Washington Post
