It’s not exactly the calvary…much less the charge of the light brigade, but Overstock’s stalking horse offer to buy bits and pieces of the intellectual property of Bed Bath & Beyond may represent the best possible outcome of a very bad situation.
Overstock, the online player that has converted from a general merchandise seller to an all-home-all-the-time format, submitted its $21.5 million bid earlier this week to a New Jersey bankruptcy court in advance of the June 16 deadline for competing offers. Should no one else pony up the money to outbid Overstock it will ride off into the retail sunset (sorry, will try to limit the equestrian cliches soon, I promise) with what was once one of the more storied brand names in home furnishings retailing.
And assuming it doesn’t end up costing a whole lot more as the result of a bidding war, it will be a pretty good deal for Overstock. It will get the URL and be able to corral potential customers to its own online ranch, perhaps keeping BBB as a free-standing retailer or just folding it in. Either way, it will have more visibility on that worldwide web range and should recoup its investment in a fairly acceptable time frame.
Just to be clear, Overstock is not interested in any Bed Bath stores which are likely to become retail ghost towns…that is until they become Planet Fitness, HomeGoods, Ross or pickleball locations. Turns out they are in great demand given the lack of new retail space construction over the past five years. Just imagine if BBB had stayed out of chapter 11 and sublet many of its locations itself, perhaps keeping its e-commerce side alive and well…rather than the ridiculous charade it tried to pull off with its endless series of cockamamie financing scenes that only postponed the inevitable liquidation.
BBB, by the way, released its annual report this week as well, a largely moot document that confirmed how bad its business had deteriorated while it was forestalling doing anything much about it. Again, if it had been as creative and diligent in trying to fix its retail business as it was with all of those ill-fated financing schemes it might not have landed at the OK Corral shootout it finds itself in now.
We knew somebody would buy the BBB intellectual assets and it may end up being somebody else other than Overstock. You have to think some of the usual suspects – Authentic Brand Group, Sycamore, Ryan Cohen – are circling the BBB wagons looking for a deal. After all, if somebody bought and is still operating brands like Montgomery Ward, Fingerhut and of course BBB’s one-time nemesis Linens’n Things after all these years it stands to reason the BBB brand would be a good notch to have in your merchandising belt.
We’re not talking about a horse with no name. The Bed Bath & Beyond name still means a lot to a lot of people. Proving that if you fall off your horse, the best thing to do is to get right back on, somebody is going to ride this one for another retail roundup. (OK, enough bad cliches…)
WarrensReport 