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SALT LAKE CITY — After filing for Chapter 11 bankruptcy protection in April, once-mighty U.S. retailer Bed, Bath & Beyond is being analyzed in liquidation auctions, with Utah online giant Overstock.com looking to snap up the chain’s branding, intellectual property and Other assets. But the brick-and-mortar stores are not part of the deal.
Overstock made a low-ball “stalking horse” bid of $21.5 million last week, and according to The Washington Post; Bed Bath & Beyond confirmed on Thursday that it had accepted the offer. If approved by a New Jersey bankruptcy court at a hearing next week, Overstock will buy Bed, Bath & Beyond̵[ads1]7;s brand name, business data and digital assets. Physical stores are not part of the agreement. At its peak, Bed, Bath & Beyond operated over 1,500 stores, but from the beginning of May was down to around 350 locations.
In response to a request from the Deseret News, Overstock.com declined to comment pending completion of the deal. Shares of Overstock were up more than 17% for the day at the close of regular trading on Thursday.
Bed, Bath & Beyond’s value has been on a downward spiral since the stock hit a peak price of around $81 per share in early 2014. By April of this year, the stock price had fallen to just pennies per share. Analysts have pointed to a myriad of missteps by the company’s executives, including a failed shift from third-party products to store-brand goods and a massive stock buyback program.
While Overstock will look for ways to leverage Bed, Bath & Beyond’s intangible assets upon completion of the deal, Bed, Bath & Beyond is seeking a separate path to spin off its Buy Buy Baby branded division, which includes about 120 stores and is considered the company’s most valuable remaining asset. Buy Buy Baby’s assets will be on the auction block next Wednesday, according to CNBC.
Last August, Bed, Bath & Beyond announced it would close stores and lay off workers in an effort to turn around its beleaguered business, according to The Associated Press. It closed about 150 of its same stores and cut its workforce by 20%. It estimated that these cuts would save the company $250 million in the current fiscal year. It also said in August that it had lined up more than $500 million in new funding.
In a prolonged sales slump, the company also announced in August that it would return to its original strategy of focusing on national brands, rather than pushing its own store labels.
It reversed a strategy embraced by former CEO Mark Tritton, who was ousted last June after less than three years at the helm, according to the AP. The company said it would get rid of a third of its store brands less than a year after they were launched.
After a dismal financial report released in January, Bed Bath & Beyond’s current president and CEO, Sue Gove, said the company had struggled to keep plenty of inventory on hand thanks to credit issues with suppliers, but even amid the flurry of grim financial news , at at the time she still thought there was a chance to save the business.