Bed Bath & Beyond announced plans on Tuesday Sell the Christmas Tree Shops banner to Handil Holdings in a deal expected to close next month.
As part of the purchase agreement, Bed Bath & Beyond agreed to hand over all 80 stationary Christmas Tree Shops and a distribution center in Middleborough, Massachusetts. Handil will continue to operate the banner as an independent company, according to a press release from the company.
Bed Bath & Beyond has also agreed to sell two other non-core assets that are expected to close this month: a distribution center in Florence, New Jersey and the Linen Holdings business, which includes bedding, terrycloths and clothing. for the hotel and healthcare industries. The combination of the three asset sales is expected to generate approximately $ 250 million.
Bed Bath & Beyond bought Christmas Tree Shops for $ 200 million in cash back in 2003, at a time when it only operated 23 stores in six states. In the 17 years since that acquisition, the homeware retailer has nearly quadrupled the banner’s presence in 20 states.
However, the homewares retailer has struggled in recent years as online retailers and bulk sellers continued to steal market share and tasked CEO Mark Tritton, who joined the company just under a year ago, with a turnaround that will likely determine that Fate of the retailer.
Tritton has been working for the past 11 months to revamp its C-suite, downsizing its workforce, closing stores, and selling other non-core assets like One Kings Lane and PersonalizationMall.com to streamline business and costs to lower.
“Today’s announcement builds on the targeted steps we have taken over the year to simplify our portfolio, free up capital, and create clear strategic focus to support our plans to build our authority in the home, baby markets To accelerate beauty and wellness, “Tritton said in a statement.
However, the pressure to sell the company’s non-core assets came before Tritton’s arrival: An activist group of investors urged Bed Bath & Beyond in April 2019 to review its portfolio and sell banners to improve cash flow, including Christmas Tree Shops, PersonalizationMall.com and Cost Plus World Market. With the company pointing to the potential to discharge additional assets on Tuesday, a sale of the Global Cost Plus market – which Wedbush analysts estimate at around $ 200 million – could soon round out that trilogy.
“We are positive about these non-core dispositions as the company continues to focus on core business with Bed Bath and Buy Buy Baby,” said Seth Basham, an analyst at Wedbush, in an email.
And the pandemic that has hurt much of the industry appears to have improved Bed Bath & Beyond’s prospects for a turnaround. Earlier this month, the retailer reported its first quarterly increase in comps since 2016, largely driven by an 89% year-over-year increase in its digital channels. The company introduced online purchase, in-store pickup, and contactless curbside pickups earlier this year, and announced in May that the service will expand to 90% of its fleet. The company also launched same-day delivery at its Bed Bath & Beyond and BuyBuyBaby stores earlier this month through partnerships with Shipt and Instacart
“Customers are responding well to the introduction of our new Omni Always services. We will continue to invest in our digital first experience with a customer-inspired range that will make you feel at home at Bed Bath & Beyond,” so Tritton said.