Overstock.com, Inc. reported it acquired certain intellectual property assets of the Bed Bath & Beyond banner from Bed Bath & Beyond, Inc. under a Bankruptcy Court supervised process.
“This acquisition is a significant and transformative step for us,” said Overstock CEO Jonathan Johnson. “Bed Bath & Beyond is an iconic consumer brand, well-known in the home retail marketplace. The combination of our winning asset-light business model and the high awareness and loyalty of the Bed Bath & Beyond brand will improve the customer experience and position the company for accelerated market share growth.”
Overstock is an online retailer of indoor and outdoor furniture, home décor and area rugs, among other home furnishing products. Through the acquisition, Bed Bath & Beyond customers will be able to purchase inventory from both retailers.
Brand Integration
Within the next week, Overstock plans to re-launch the Bed Bath & Beyond domain in Canada, followed weeks later by re-launching a refreshed website, mobile app and loyalty program in the United States. New and existing customers of Overstock and Bed Bath & Beyond will see one online shopping platform, bedbathandbeyond.ca, in Canada and bedbathandbeyond.com in the U.S.
Overstock is re-branding its Club O loyalty program as Welcome Rewards. The newly branded Welcome Rewards program will continue to offer 5 percent reward dollars for all purchases redeemable in subsequent transactions.
“Combining the strengths of the Overstock operational model and the Bed Bath & Beyond brand will create a powerful synergy,” Johnson said. “I’m excited for consumers to experience the new Bed Bath and an even bigger and better Beyond.”
Transaction Details
The acquired Bed Bath & Beyond assets include website and domain names, trademarks, trade names, patents, customer database, loyalty program data, and other brand assets related to the Bed Bath & Beyond banner.
The U.S. Bankruptcy Court for the District of New Jersey approved Overstock’s bid at a sale hearing held on June 27, 2023.
The transaction excludes assets associated with the brick & mortar business of Bed Bath & Beyond, Inc., including store leases, inventory, warehousing, and logistics infrastructure.
The Buybuy Baby and Harmon banners and their assets formerly operated by Bed Bath & Beyond, Inc. were also excluded from the transaction.
Pursuant to Overstock’s winning bid and asset purchase agreement, the company purchased the assets for $21.5 million, funded with cash on- hand. As previously disclosed, the company had $374.7 million in cash and cash equivalents at the end of March 31, 2023.
Legal advisors to Overstock on the transaction were Wachtell, Lipton, Rosen & Katz, and financial advisors were Guggenheim Securities, LLC. Overstock engaged Bain & Co. and Redscout to provide brand integration management services.
Second Quarter 2023 Performance Preliminary Update
Overstock is providing select preliminary second-quarter 2023 financial information.
Overstock reported second quarter-to-date revenue is estimated to have declined in the low-20 percent range compared to the second quarter of 2022. The company said 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. While this has put pressure on profitability, the company expects to deliver positive adjusted EBITDA for 2Q 2023.
Photo courtesy Bed, Bath & Beyond
