Bed Bath & Beyond Agrees to Sell Cost Plus World Market to Private Equity Firm, Including 243 Stores

by John Nelson

UNION, N.J. AND LOS ANGELES — Bed Bath & Beyond Inc. (NASDAQ: BBBY) has agreed to sell Cost Plus World Market, a specialty retail chain that sells home furniture, décor and international food products. The buyer, Los Angeles-based private equity firm Kingswood Capital Management, expects to continue operations under the Cost Plus World Market banner.

The purchase agreement includes 243 brick-and-mortar locations, the World Market digital business, two distribution facilities and a corporate office located in Alameda, Calif. Both companies have agreed to a transition services agreement (TSA) following the close of the transaction to help ensure business continuity. The sales price was not disclosed.

Cost Plus World Market opened its first store in 1958 on San Francisco’s famous Fisherman’s Wharf. Today the company operates stores in 39 states coast to coast, as well as one in Washington, D.C. Bed Bath & Beyond acquired Cost Plus World Market in 2012.

The transaction is scheduled to close prior to the end of Bed Bath & Beyond’s fiscal year on Feb. 27, 2021, and is subject to customary closing conditions. Advisors to Bed Bath & Beyond on this transaction included B. Riley Securities Inc. and Bryan Cave.

In addition to the sale of Cost Plus World Market, Bed Bath & Beyond has unloaded four other business concepts this year to improve its fiscal outlook. These include, a wholesale online retailer that is now part of Inc. ; Christmas Tree Shops, a retail chain that operates 80 stores in the Eastern United States; Linen Holdings, a textile distributor based in Gibbsboro, N.J.; and One Kings Lane, an online marketplace of décor and furnishings that Bed Bath & Beyond acquired in 2016.

The Union-based company also sold a distribution center in Florence, N.J., in a sale-leaseback deal and a Christmas Tree Shops-occupied distribution center in Middleborough, Mass.

“We have unlocked significant value from the divestiture of five business concepts this year, and we have also meaningfully reduced our lease liability and overall debt,” says Mark Tritton, president and CEO of Bed Bath & Beyond. “These actions provide greater financial flexibility to support our digital-first transformation and our commitment to deliver sustainable total shareholder return.”

Bed Bath & Beyond announced over the summer its intention to close 200 underperforming retail stores by 2021. According to CNBC, Bed Bath & Beyond plans to launch 10 new retail brands in spring 2021 that will focus on its core competencies of home, baby, and health and wellness merchandise.

The retailer has also made key C-suite hires in recent months to streamline its corporate restructuring program. These include new CFO Gustavo Arnal, COO John Hartmann, new chief technology officer Scott Lindblom and new chief strategy and transformation officer Anu Gupta. Bed Bath & Beyond hired Tritton as its new CEO last year.

Concurrent with the Cost Plus World Market sale, Bed Bath & Beyond has announced an expansion of its total share repurchase program to buy back up to $825 million in the retailer’s common stock over the next three years. This will be accomplished in part by the approval of two new accelerated share repurchase (ASR) programs totaling $375 million. Both ASR programs are scheduled for completion by no later than the end of the company’s fiscal year.

Bed Bath & Beyond’s stock price closed on Monday, Dec. 14 at $19.37 per share, up from $15.18 a year ago.

— John Nelson

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