Bed Bath & Beyond (BBBY) has agreed to sell its intellectual property assets to Overstock.com (OSTK) for $21.5 million, according to a document filed Thursday in Bed Bath’s Chapter 11 bankruptcy case.
Overstock will pay for Bed Bath & Beyond's brand name, business data and digital assets. The move comes nearly two months after Bed Bath & Beyond filed for Chapter 11 bankruptcy protection following a years-long decline in sales doomed the home goods retailer.
Bed Bath's physical retail stores are not slated to remain open under the agreement.
Overstock's stock shot up nearly 10% in pre-market trading Thursday following the news.
Bed Bath’s baby goods retail chain Buy Buy Baby is not included in the Overstock.com deal. Its assets are scheduled for a bankruptcy-run action on Wednesday.
A hearing in US bankruptcy court for the District of New Jersey is set on Tuesday for the parties to request approval of the deal.
Bed Bath & Beyond (BBBY) hedged its bets when it filed for Chapter 11 protection in April, simultaneously posturing for a wind down while also vying to stay in business.
A Chapter 11 filing typically helps financially distressed companies work out a plan with their creditors to reorganize debt and emerge as a viable entity. But Bed Bath & Beyond announced it would focus on liquidating assets, a path typically pursued as part of a Chapter 7 bankruptcy.
The $21.5 million for parts of Bed Bath & Beyond's business is a far cry from the company's all-time high market cap of more than $16 billion in 2013. After peaking at $12.3 billion in 2017, sales at the retailer have collapsed in recent years, totaling just $7.9 billion in 2021, its lowest annual tally since 2009. Through the first three quarters of 2022, the company was on pace for sales that would have matched levels reported in the mid-2000s.
While private labels have become an increasing part of the growth story for Target (TGT), Macy’s (M), Walmart (WMT), and other large retailers, Bed Bath & Beyond fell behind. The company's decline was only accelerated by the pandemic as shoppers switched to online retailers like Amazon (AMZN) and Wayfair (W).
JOWA Brands was selected as the backup bidder solely for intellectual property assets associated with Bed Bath's own Wamsutta sheets and towels brand.
Ten Twenty Four was selected as the backup bidder solely for Bed Bath’s Beyond.com domain. The company, which operates under the name Beyond Pricing, designs and develops pricing software to help maximize revenue for hosts and owners of vacation rental properties.
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