Bed Bath & Beyond to sell IP to Overstock.com
June 22, 2023: Bed Bath & Beyond (BBBY) has agreed to sell its intellectual property assets to Overstock.com (OSTK) for $21.5 million. This move comes as Bed Bath & Beyond faces financial difficulties and filed for Chapter 11 bankruptcy protection.
Under the deal, Overstock will acquire Bed Bath & Beyond’s brand name, business data, and digital assets. However, Bed Bath’s physical retail stores are still expected to close as part of the bankruptcy proceedings.
The agreement’s news positively impacted Overstock’s stock, which surged by 14% in early trading on Thursday.
It’s worth noting that Bed Bath’s baby goods retail chain, Buy Buy Baby, is not included in the deal with Overstock.com. Its assets will be subject to a separate bankruptcy-run action.
The agreement is pending approval from the US bankruptcy court for the District of New Jersey, with a hearing scheduled for Tuesday.
Bed Bath & Beyond’s decision to file for Chapter 11 bankruptcy protection initially hinted at a possible business wind-down. However, the company later stated its intention to focus on liquidating assets, which is more commonly associated with Chapter 7 bankruptcy.
The $21.5 million price tag for Bed Bath & Beyond’s assets is a significant drop from its peak market cap of over $16 billion in 2013. The company has experienced declining sales in recent years, with just $7.9 billion in 2021, the lowest annual figure since 2009. The pandemic further accelerated its decline as consumers shifted towards online retailers like Amazon and Wayfair.
In addition to the Overstock.com deal, JOWA Brands was selected as the backup bidder for Bed Bath’s own Wamsutta sheets and towels brand, and Ten Twenty-Four was chosen as the backup-bidder for the Beyond.com domain, which operates under the name Beyond Pricing and provides pricing software for vacation rental properties.
While selling intellectual property assets offers some financial relief for Bed Bath & Beyond, the company still faces significant challenges in its quest to revitalize its business and adapt to changing consumer preferences.