Mattress Bathtub & Past to dump Value Plus World Market banner

Diving letter:

  • Bed Bath & Beyond has reached a definitive agreement Sell ​​his Cost Plus World Market banner to Kingswood Capital Management, a private equity firm, for an undisclosed amount.

  • The deal includes 243 brick and mortar stores, the banner’s digital store, two sales offices and a California-based corporate office, according to a press release on Monday.

  • Bed Bath & Beyond that initially acquired Cost Plus World Market in 2012expects the transaction to close before the end of the fiscal year in February, subject to customary closing conditions.

Dive Insight:

With the announced sale of the Cost Plus World Market banner, Bed Bath & Beyond’s only remaining non-core asset, the company is lagging behind with its namesake, BuyBuy Baby, Harmon Face values ​​and its decorating business.

He’s been working on it since CEO Mark Tritton took over the helm late last year overturn his C-suite, Reduce the company’s store needs and sell other non-core banners – like One Kings Lane, and Christmas tree shops – to get the company back on track.

“We have deliberately taken steps throughout the year to streamline our portfolio and strengthen our strategic focus on home, baby and beauty & wellness. Today’s announcement marks the completion of that work,” Tritton said in a statement, adding Add course to the five companies to sell This year it reduced its lease liability and total debt. “These measures provide greater financial flexibility to support our digital first, ubiquitous transformation and our commitment to sustainable total shareholder return,” he said.

However, long before Tritton’s arrival, the company was pressured by activist investors to sell its non-core businesses. The group invited Bed Bath & Beyond to do so in April 2019 Check the portfolio and sell banners to increase cash flow. And although no deal amount was named on Monday, Wedbush analyst Seth Basham previously set the value of the World Cost Plus market at around $ 200 million.

The Cost Plus World Market may have been hit by the pandemic as consumers continue to be cautious about shopping in stores. This is a key component to success, said Neil Saunders, managing director of GlobalData. “While there are a reasonable number of loyal customers, the Cost Plus World Market relies on a high level of customer experience for its business to work,” Saunders said in comments sent via email. “This issue may resolve itself in 2021, but Bed Bath & Beyond doesn’t want to take the risk of having to fix another brand in addition to fixing the main banner issues.”

Bed Bath & Beyond appears well positioned to reverse its business, which has suffered from declining sales and market share for years. The capital gained from banner sales allows the company to continue investing in improving its business and improving its online capabilities. Additionally, the company has proven to be one of the few beneficiaries of the pandemic in recent months. Consumers have invested more in their homes as they are forced to spend most of their time there. Bed Bath & Beyond reported its in October first sales growth since 2016of 6%.