From decorating our lockers in middle school to buying all the college dorm room necessities to finding all the household items needed to move into our first apartment, Bed Bath & Beyond was always the go-to place for all our home goods essentials.
This retailer had an extensive assortment of furniture, home décor, kitchen gadgets, and even random 'As Seen On TV' products. And, of course, its infamous 20% off coupon, which was too good to let go to waste.
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After over 50 years of business, Bed Bath & Beyond filed for Chapter 11 bankruptcy in April 2023 and was forced to close all its existing stores as it had accumulated $1.8 billion in long-term debt. At the time of the filing, the company had 360 Bed Bath & Beyond stores and 120 buybuy BABY locations.
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Bed Bath & Beyond obtained a $240 million loan to continue operations during the bankruptcy while it found a buyer, or it would go out of business and cease to exist.
Bed Bath & Beyond exits Chapter 11 bankruptcy
In June 2023, the online home goods retailer Beyond Inc., formerly known as Overstock, acquired Bed Bath & Beyond through a winning bid sale for $21.5 million, which it paid fully in cash. The transaction excluded Bed Bath & Beyond's brick-and-mortar business and the buybuy BABY brand.
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This acquisition turned Bed Bath & Beyond into a fully e-commerce retailer. However, the once-popular big-box retail chain refused to limit its business to an online format.
Bed Bath & Beyond
Bed Bath & Beyond announces partnership with rival retailer to return to physical stores
In October of last year, Bed Bath & Beyond and The Container Store (TCS) announced they had entered a strategic partnership to improve their customer experience by offering both brands in one place.
As agreed in the transaction, Beyond Inc. (OSTK) invested $40 million in The Container Store through a preferred equity transaction to showcase and sell Bed Bath & Beyond products in 102 locations.
Although the companies had once been rivals due to having very similar target audiences, this partnership seemed like the perfect match since The Container Store is a home goods retailer specializing in organization solutions products and in-home services, and Bed Bath & Beyond is a retail chain that sells home goods, including housewares, furniture, and home décor.
Bed Bath & Beyond expands its reach to more physical stores
This past October, Beyond Inc. and Kirkland's had agreed to join forces to sell Bed Bath & Beyond products at Kirkland's locations to expand its physical exposure. Additionally, Kirkland's would become the exclusive licensee to develop physical Bed Bath & Beyond stores with a smaller format.
Kirkland's, Inc. (KIRK) is an American retailer that specializes in home décor and furnishings. It operates 317 stores nationwide and an e-commerce website.
After almost four months of negotiations, Kirkland's announced on Wednesday that Beyond Inc. had finalized a $8 million equity purchase under a subscription agreement and a $8.5 million mandatory conversion term loan under a term loan credit agreement.
With the completion of this transaction, Beyond Inc. now owns 40% of Kirkland's outstanding shares of common stock, providing the company with $25 million of capital.
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Under a seven-year agreement, Beyond Inc. would earn 0.25% of Kirkland's quarterly sales for both its brick-and-mortar business and online store, as well as a 1.5% incentive fee for its growth beginning the first quarter of fiscal 2025.
Additionally, Beyond Inc. would earn 3% royalty fees for all store sales generated by Bed Bath & Beyond during the agreement period, increasing to 5% if the locations are still operating.
According to the agreement, Beyond Inc. also has the right to nominate two of Kirkland's board of directors as long as it holds a minimum 20% stake in the company. However, if it falls under 5%, the board nomination will be reduced to one.
"Today marks a pivotal moment for Kirkland's, as the completion of this transaction and ongoing value of our strategic partnership with Beyond begin to unlock new drivers of transformation following our efforts over the past year focused on revitalizing the Kirkland's brand," said Kirkland's CEO, Amy Sullivan.
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