Whether you're a home décor aficionado or simply looking for household items, Bed Bath & Beyond was always the go-to place for all your home goods essentials, not only because of its extensive assortment but also because of its infamous 20% off coupon was too good to let go to waste.
For over 50 years, Bed Bath & Beyond has been a part of many people's lives.
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It was there when we went through that awkward teenage phase and had the urge to redecorate our entire room.
For those who went to college, it was there to help us find all the dorm necessities to make that four-by-four room feel like a home.
It was also there to ease our stress by helping us find all the household items we needed to move into our first apartment.
Unfortunately, everything good reaches an expiration date at some point.
Bed Bath & Beyond exits Chapter 11 bankruptcy after being acquired
Bed Bath & Beyond filed for Chapter 11 bankruptcy in April last year and was forced to close all its existing stores.
In June 2023, the online home goods retailer Overstock, now known as Beyond Inc., acquired Bed Bath & Beyond for $21.5 million and turned the brand into a fully online retailer.
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However, Bed Bath & Beyond's new owner refused to let such a beloved brand be forgotten after it brought so much joy to its customers for multiple years, so it devised a new strategic plan to help the brand return to its glory days.
As the saying goes, "If you can't beat them, join them," so Beyond Inc. called one of its home goods competitors to get its plan up and running.
On Oct. 15, the company signed an agreement with The Container Store (TCS), under which Beyond Inc. (OSTK) would invest $40 million in its former rival to showcase and sell Bed Bath & Beyond (BBBY) products in 102 of its locations through a preferred equity transaction.
Beyond Inc. and Kirkland's join forces to become a home goods super force
On Monday, Beyond Inc. announced its strategic partnership with another home goods rival, Kirkland's (KIRK) , to open five small-format Bed Bath & Beyond stores where Kirkland's would be the exclusive operator and licensee.
Kirkland's is also a home décor and furnishings retailer, operating 325 stores across 35 states.
Both retailers specialize in the same product category and target a similar audience, making them rivals for years, until now.
With this partnership, Beyond Inc. plans to capitalize on Kirkland's presence by driving revenue growth through expanding its product assortment, enhancing its supply chain to reduce costs, and improving inventory management.
Additionally, Kirkland's will be added to Beyond Inc.'s consumer data collective, global loyalty program, financial services, and consumer protection products to drive traffic, increase conversion, and lower customer acquisition and retention costs.
According to the collaboration agreement, Beyond Inc. is investing $25 million in Kirkland through combined debt and equity transactions to strengthen its capital position and support its growth initiatives.
Details of the Beyond Inc. and Kirkland's agreement
As agreed to by both companies, Beyond Inc. is providing Kirkland's with $17 million in debt financing. Upon approval of its shareholders, $8.5 million will be allocated to Kirkland's common stock at its conversion price of $1.85 per share.
The company also plans to purchase an additional $8 million of Kirkland's common stock at the conversion price.
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Additionally, a seven-year agreement was signed in which Beyond Inc. will earn a collaboration fee of 0.25% on Kirkland's retail and e-commerce revenue and an incentive fee of 1.5% on its incremental growth in e-commerce revenue, beginning in Kirkland's first fiscal quarter of fiscal 2025.
A trademark license agreement was also signed. Beyond Inc. will earn 3% in royalty-free net store sales generated by the Bed Bath & Beyond brand during the collaboration agreement's term and 5% of net store sales after the term has ended.
"An omnichannel approach to Bed Bath & Beyond is quintessential to its success," said Beyond, Inc.'s Executive Chairman Marcus Lemonis. "We understand that retail is both an art and a science and have vetted the management team and infrastructure of Kirkland's Home as an ideal organization to help bring the iconic Bed Bath & Beyond brand back," he added.
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