Picture of Bed Bath & Beyond storefront, blue sign and white lettering, taken at a slight angle
Source: iStock | JHVEPhoto

Overstock.com has submitted a $21.5 million bid to acquire Bed Bath & Beyond’s intellectual property and some of its assets as part of the bankruptcy process. The retailer’s stores are not part of the bid.

The offer by Overstock is considered a stalking horse bid, effectively setting the floor for an auction of the company, which is expected to take place on June 21, CNBC reports. Other bidders have until Friday at noon ET to submit their offers for all or part of the retailer. The auction for Bed Bath & Beyond is expected to take place on June 21.

Overstock’s bid included “business data, rights to mobile applications, and certain contracts and other related assets, and to assume certain specified liabilities of Bed Bath & Beyond,” according to a spokesperson for the retailer who spoke with The Washington Post.

It’s unclear what Overstock would do with the Bed Bath & Beyond name and data should it succeed at auction.

The retailer’s Buybuy Baby business has drawn interest from some potential bidders including Babylist and Go Global Retail, the owner of Janie and Jack.

Babylist, the baby registry website, is interested in acquiring the Buybuy Baby trademark and domain but not its stores. The site, which has a strong following from a younger generation of parents and those expecting to become ones, sees the chain’s name as a means to connect with grandparents. People going to the Buybuy Baby site would be redirected to Babylist.

“We really think it can jumpstart us in that way,” Babylist CEO Natalie Gordon told CNBC.

Go Global Retail’s reported interest appears to be Buybuy Baby’s best shot at remaining viable. The Wall Street Journal reports that it is interested in keeping the chain’s stores operating.

Buybuy Baby has been seen as Bed Bath & Beyond’s most valuable asset. Ryan Cohen, executive chairman of GameStop, who held a stake in the retailer at one point, had pushed for a sale of the business believing it could fetch several billion dollars. A sale never materialized and now many see a deal to save Buybuy Baby as something of a long shot as the chain has been liquidating inventory along with Bed Bath & Beyond’s namesake business.

BrainTrust

“The litany of errors this organization made is not unique. They could be applied to many companies in retail and otherwise.”

Gene Detroyer

Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.


“Maybe printing 20%-Off coupons against an already padded price is not a viable business model & was ineffective against Amazon, Walmart, and all the other online competitors.”

Ken Morris

Managing Partner Cambridge Retail Advisors


“From management changes & activist investors to poor product strategy & store experience, it’s been a litany of decisions and events that have resulted in this sad conclusion.”

Mark Ryski

Founder, CEO & Author, HeadCount Corporation

Discussion Questions

DISCUSSION QUESTIONS: How did Bed Bath & Beyond go from a once successful retailer to its current state? Do you think Buybuy Baby can eventually succeed if the business is rescued from bankruptcy?

Poll

How likely is it that a buyer will be found that will keep many of Buybuy Baby’s stores open?

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10 responses to “Is Bed Bath & Beyond Worth More Than $21.5 Million?”

  1. Mark Ryski Avatar
    Mark Ryski

    The demise of Bed, Bath & Beyond has been well documented. From management changes, and activist investors to poor product strategy and store experience, it’s been a litany of decisions and events that have resulted in this sad conclusion. I do believe that Buybuy Baby can eventually be rescued, but there is no guarantee of it’s success either. At the end of it all, $21M is a sad epitaph to this once leading retailer and a cautionary tale for others.

  2. Gene Detroyer Avatar
    Gene Detroyer

    If one were to look back on all the RetailWire discussions regarding Bed Bath & Beyond, one would get a history and a clear picture of what went wrong every step of the way.

    The litany of errors this organization made is not unique. They could be applied to many companies in retail and otherwise.

    The offers for both sides of the business that do not include the stores give an indication that every retailer should watch.

    In any case, take care to understand this case study. It surely will be repeated again and again.

    1. Richard Hernandez Avatar
      Richard Hernandez

      Yes, we did discuss the many ongoing facets of this business on many occasions. The category killer retailers were so successful not so many years ago, but the environment changed and many of these stores did not keep up- like this one.
      If they can get $21M for Buybuy Baby, take it while the iron is hot.

      1. Patricia Vekich Waldron Avatar
        Patricia Vekich Waldron

        You’re right on, Richard! Category Killers were once the hot segment, but now their big box stores are a liability.

  3. Ken Morris Avatar
    Ken Morris

    Buybuy Baby is a viable business and certainly is worth the bid times 10. I have absolutely no idea why BBBY went under. One theory might be they where a specialty store in a big box that lacked the experience of a boutique. I think the brand would succeed with smaller footprint stores with a more intimate setting. Customers like to touch and feel bedding and towels so it is a tactile purchase. Their prices were not heavily discounted but had an atmosphere that was off price.

    As it turns out, maybe printing 20 Percent Off coupons against an already padded price is not a viable business model and was ineffective against Amazon, Walmart, and all the other online competitors.

  4. Peter Charness Avatar
    Peter Charness

    As the saying goes, it’s worth what a buyer is willing to pay. The description is a bit murky in that it doesn’t specify what liabilities, and it’s unclear if the “brand” goes with it (I assume that it does) Perhaps there should be a virtual museum established associated with a universities Retail program where Bed Bath can take it’s place next to K Mart, Sears and others that were managed to their grave, or whose time had simply passed.

  5. Carol Spieckerman Avatar
    Carol Spieckerman

    Strategy misfires aside, the short answer is that category killing was a great model until it wasn’t. I’m not bullish on intellectual property plays these days either. Nostalgic brand awareness no longer ensures a second act. Retail Ecommerce Ventures is an example of a company that saw opportunity as more retail brands faltered, especially category-killers. REV’s portfolio is a real trip down category-killer memory lane. It snatched up Pier 1, Dressbarn, Linens ‘N Things, Stein Mart, the Franklin Mint, RadioShack, and Modell’s Sporting Goods. Then red flags started flying when it bought Tuesday Morning earlier this year. Tuesday Morning went Chapter 11 a month later. Now, rumors of REV going bankrupt and taking all those brands’ second chances away, have been flying. I don’t see Overstock’s sans-stores play as being compelling in this environment.

  6. Neil Saunders Avatar
    Neil Saunders

    Bed Bath & Beyond is a very damaged business. It has huge debts, a tarnished brand, a dwindling physical presence, and a broken business model. As such, no one is going to pay a premium for it. That said, there is value some value in the IP, especially for anyone who wishes to run the brand as an online-only venture.

    As to what went wrong … where do I start? There were a whole catalogue of mistakes down the years: not getting into e-commerce early enough, not adapting stores to changing competitive conditions, developing private label with no reference to the customer, and of course spending billions on share buybacks. The rot set in over a long time.

  7. Mark Self Avatar
    Mark Self

    There will be no climbing out of this hole.

  8. Joel Rubinson Avatar
    Joel Rubinson

    Personally, I am saddened. I actually loved shopping there especially their coffee area. Whenver I was there at my local store, it was packed so I wonder if the main issue was financial mismanagement.

10 Comments
oldest
newest
Mark Ryski
Mark Ryski
1 month ago

The demise of Bed, Bath & Beyond has been well documented. From management changes, and activist investors to poor product strategy and store experience, it’s been a litany of decisions and events that have resulted in this sad conclusion. I do believe that Buybuy Baby can eventually be rescued, but there is no guarantee of it’s success either. At the end of it all, $21M is a sad epitaph to this once leading retailer and a cautionary tale for others.

Gene Detroyer
Gene Detroyer
1 month ago

If one were to look back on all the RetailWire discussions regarding Bed Bath & Beyond, one would get a history and a clear picture of what went wrong every step of the way.

The litany of errors this organization made is not unique. They could be applied to many companies in retail and otherwise.

The offers for both sides of the business that do not include the stores give an indication that every retailer should watch.

In any case, take care to understand this case study. It surely will be repeated again and again.

Richard Hernandez
Richard Hernandez
  Gene Detroyer
1 month ago

Yes, we did discuss the many ongoing facets of this business on many occasions. The category killer retailers were so successful not so many years ago, but the environment changed and many of these stores did not keep up- like this one.
If they can get $21M for Buybuy Baby, take it while the iron is hot.

Patricia Vekich Waldron
Patricia Vekich Waldron
  Richard Hernandez
1 month ago

You’re right on, Richard! Category Killers were once the hot segment, but now their big box stores are a liability.

Ken Morris
Ken Morris
1 month ago

Buybuy Baby is a viable business and certainly is worth the bid times 10. I have absolutely no idea why BBBY went under. One theory might be they where a specialty store in a big box that lacked the experience of a boutique. I think the brand would succeed with smaller footprint stores with a more intimate setting. Customers like to touch and feel bedding and towels so it is a tactile purchase. Their prices were not heavily discounted but had an atmosphere that was off price.

As it turns out, maybe printing 20 Percent Off coupons against an already padded price is not a viable business model and was ineffective against Amazon, Walmart, and all the other online competitors.

Peter Charness
Peter Charness
1 month ago

As the saying goes, it’s worth what a buyer is willing to pay. The description is a bit murky in that it doesn’t specify what liabilities, and it’s unclear if the “brand” goes with it (I assume that it does) Perhaps there should be a virtual museum established associated with a universities Retail program where Bed Bath can take it’s place next to K Mart, Sears and others that were managed to their grave, or whose time had simply passed.

Carol Spieckerman
Carol Spieckerman
1 month ago

Strategy misfires aside, the short answer is that category killing was a great model until it wasn’t. I’m not bullish on intellectual property plays these days either. Nostalgic brand awareness no longer ensures a second act. Retail Ecommerce Ventures is an example of a company that saw opportunity as more retail brands faltered, especially category-killers. REV’s portfolio is a real trip down category-killer memory lane. It snatched up Pier 1, Dressbarn, Linens ‘N Things, Stein Mart, the Franklin Mint, RadioShack, and Modell’s Sporting Goods. Then red flags started flying when it bought Tuesday Morning earlier this year. Tuesday Morning went Chapter 11 a month later. Now, rumors of REV going bankrupt and taking all those brands’ second chances away, have been flying. I don’t see Overstock’s sans-stores play as being compelling in this environment.

Neil Saunders
Neil Saunders
1 month ago

Bed Bath & Beyond is a very damaged business. It has huge debts, a tarnished brand, a dwindling physical presence, and a broken business model. As such, no one is going to pay a premium for it. That said, there is value some value in the IP, especially for anyone who wishes to run the brand as an online-only venture.

As to what went wrong … where do I start? There were a whole catalogue of mistakes down the years: not getting into e-commerce early enough, not adapting stores to changing competitive conditions, developing private label with no reference to the customer, and of course spending billions on share buybacks. The rot set in over a long time.

Mark Self
Mark Self
1 month ago

There will be no climbing out of this hole.

Joel Rubinson
Joel Rubinson
1 month ago

Personally, I am saddened. I actually loved shopping there especially their coffee area. Whenver I was there at my local store, it was packed so I wonder if the main issue was financial mismanagement.