BUYBUY Baby has gotten a second life after bankruptcy and mass closures.
Beyond Inc., the parent company of Bed Bath & Beyond, is set to purchase the retailer.
An asset purchase agreement for the global rights of BuyBuy Baby was submitted by the company on Monday, per a news release.
Should the deal go through, BuyBuy Baby will once again be with Bed Bath & Beyond.
BuyBuy Baby was founded in 1996 and later bought by Bed Bath & Beyond in 2007 for $67 million and a $19 million debt repayment.
Bed Bath & Beyond went bankrupt in April 2023 and proceeded to shutter all 120 remaining BuyBuy Baby stores.
Dream on Me later bought BuyBuy Baby in July of the same year for $16.7 million, which included 11 store leases.
Those stores reopened that November, but all proceeded to shutter about a year later, leaving the future of BuyBuy Baby as a digital-only brand before Monday’s purchase announcement from Beyond, the re-branded company name for Overstock after it bought Bed Bath & Beyond’s assets.
PHYSICAL STORES EXPECTED
Either way, American consumers could soon see BuyBuy Baby merchandise once again, whether at resurrected Bed Bath & Beyond brick-and-mortar locations or stand-alone BuyBuy Baby stores.
It’s possible thanks to a seven-year partnership reached in October between Kirkland’s Home and Beyond.
The companies plan to pilot at least five smaller-format Bed Bath & Beyond locations nationwide in 2025.
Kirkland’s Home will act as the operator and licensee for the stores in exchange for about $17 million in debt financing from Beyond.
Bed Bath & Beyond locations within Kirkland’s locations are also expected.
Currently, Bed Bath & Beyond and BuyBuy Baby operate as e-commerce platforms.
Just like with Bed Bath & Beyond, Beyond plans to continue selling BuyBuy Baby products online with the potential brick-and-mortar stores.
Beyond’s deal for BuyBuy Baby won’t be complete and underway until 2026.
How does bankruptcy work?
Bankruptcy is a specific legal process that helps companies eliminate debt they can't repay.
The process allows businesses to start fresh and gain access to new credit.
Supervised by federal courts, bankruptcies allow a company to sell off its assets more easily to pay off creditors, according to Investopedia.
Chapter 11, a common process for companies, is used to restructure a business with the goal of remaining open – even if it means selling off most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows for collaboration between American and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” per the United States Courts.
Marcus Lemonis, executive chairman at Beyond, emphasized that the company believes Buy Buy Baby will succeed in the coming years thanks to the acquisition.
“Alongside our omnichannel partner, Kirkland’s, we collectively believe the BuyBuy Baby brand has a strong future both online and in brick-and-mortar,” Lemonis said in a statement to Retail Dive.
“Kirkland’s will have full flexibility, from integrating Buy Buy Baby into Bed Bath & Beyond stores to opening stand-alone locations under each legacy banner.”
POTENTIAL PROFIT?
Financial experts like Neil Saunders, managing director of GlobalData, also told the publication that while the $5 million purchase price is a win for Beyond, the company will likely have to overcome some hurdles to make BuyBuy Baby profitable again.
“The purchase price is modest, so they will be hoping to generate a return,” Saunders said.
“That said, BuyBuy Baby has fallen off the radar for a lot of consumers, so Beyond is going to have to work hard to monetize it and grow revenue.”
The expert added that BuyBuy Baby still gives Beyond “access to a specialist brand in the baby space,” something it can “integrate into other businesses and partnerships.”
Time will tell if the move reaps the rewards Beyond hopes for.
Several other retailers are also looking much different after bankruptcy filings in 2024.
Big Lots, for example, will only have around 200 remaining stores after its bankruptcy in September and a last-minute deal with Gordon Brothers Retail Partners LLC.
LL Flooring also submitted its Chapter 11 filing last year with a commitment to axe half its stores and revert to an old brand name.
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