Bed Bath & Beyond’s stores might be disappearing, but the home-goods retailer will survive in online form, after Overstock.com Inc.’s deal to acquire and revive the bankrupt chain’s website and loyalty program closed Wednesday.
Overstock OSTK, +6.11% on Wednesday said it has acquired Bed Bath & Beyond’s brand and intellectual property, in a deal that will reportedly meld both companies’ e-commerce platforms into one, under the name bedbathandbeyond.com. Overstock announced the deal’s closure a day after a bankruptcy judge approved the online furniture site’s $ 21.5 million bid to buy Bed Bath & Beyond’s assets.
Overstock said it would hold a conference call on Thursday to offer more details on the deal.
The deal will hand Bed Bath & Beyond’s website and domain names, customer database, loyalty program data, and trademarks and patents to Overstock. The deal does not include stores or inventory, or Buy Buy Baby, a baby-merchandise retailer that Bed Bath & Beyond bought in 2007.
Overstock said that within the next week, it will relaunch the Bed Bath & Beyond domain in Canada. And it said that “weeks later,” it would set up a new website, mobile app and loyalty program in the U.S.
The online furniture retailer said customers of both Overstock and Bed Bath & Beyond would be able to shop online at bedbathandbeyond.ca in Canada and bedbathandbeyond.com in the U.S.
The New York Times reported that beginning in August, shoppers in the U.S. who visit overstock.com would be routed instead to bedbathandbeyond.com. The Times reported that Overstock also planned to bring back Bed Bath & Beyond’s wedding registry, and was weighing whether to rename the combined business entirely — potentially going with Bed Bath & Beyond.
Overstock snapped up the assets after Bed Bath & Beyond filed for bankruptcy protection in April, following the chain’s struggles with cash burn, miscalculations on product mix and online competition. E-commerce demand over the past year has also slowed, after prices rose for basics and left customers with less flexibility to spend on things like home goods and electronics.
A separate auction for Buy Buy Baby had been set for Wednesday morning. But CNBC reported on Wednesday that Bed Bath & Beyond had split that process up into two parts — one for the baby-products chain’s intellectual property; the second for offers to keep its physical stores afloat, set possibly for Thursday.
Shares of Overstock were up 3.4% after hours. Over-the-counter trading of Bed Bath & Beyond BBBYQ, +4.61% stock was quiet after hours, with shares up fractionally.
Overstock on Wednesday also said it would re-brand its Club O loyalty program as Welcome Rewards.
The company said that for the second quarter so far, sales were likely down in the “low-20% range” when compared to last year.
“The promotional and marketing environment has remained highly competitive due to the weak consumer sentiment within a challenging economic backdrop and changes in consumer spending preferences,” executives said.