Signs reading “Store Closing” at a Buy Buy Baby store in the Brooklyn borough of New York, on Monday, February 6, 2023.
Stephanie Keet | Bloomberg | Getty Images
Bed bath & beyond canceled a Friday auction for its Buy Buy Baby chain because it couldn’t find a buyer willing to keep its stores running — but it’s not quite over for the baby store, CNBC has learned.
Bidders pulled out of the auction after determining the chain was no longer worth buying because its value had deteriorated so much, but there are still parties interested in the assets, according to two people close to the case stand and were not authorized to discuss it publicly.
Although it would be unusual, Bed Bath & Beyond could still accept a Buy Buy Baby offer early next week. The chain’s fate will not be finally decided until Tuesday, when a court hearing is scheduled to approve the sale of Buy Buy Baby’s intellectual property to Dream on Me Industries. The company, a little-known New Jersey retailer and one of Buy Buy Baby’s former suppliers, agreed to buy its trademark and digital assets for $15.5 million if no higher bids come along.
Once considered the crown jewel of Bed Bath & Beyond’s now-failing empire, the baby chain has been in the midst of liquidating sales of its 120 stores since its parent company filed for bankruptcy protection on April 23.
As the auction process continued and Buy Buy Baby’s stock declined, so did its value. Nearly three months after the sale closes, there is little left to bid on besides the brand’s intellectual property, one of the people said.
“Most of the value was in the IP, especially at this point in the process. You can imagine three months ago when they were fully functioning stores, that might not have been the case,” the person said.
In recent weeks, Bed Bath & Beyond has repeatedly pushed back and split up the bankruptcy-led auction process for Buy Buy Baby so it could bring in higher bids and find a company willing to keep stores afloat.
It scheduled an auction last week exclusively for Buy Buy Baby’s intellectual property and announced Dream on Me as the winner.
Bed Bath & Beyond scheduled a separate auction for Friday in which buyers could bid on the chain as a going concern, noting that Dream on Me’s bid could be superseded if they got a higher sale price.
However, it canceled the auction late Thursday when those bids fell through, a spokesperson said in a statement.
Go Global Retail, a brand investment firm represented by Ankura Capital Advisors, was interested in running about 75% of its Buy Buy Baby stores and had previously sought an additional $50 million in capital to support its bid, CNBC reported. earlier. The company is already in the baby business and currently owns the Janie and Jack children’s clothing company. It declined to comment when reached by CNBC.
Had the auction been held, the bids probably wouldn’t have been much higher than the $15.5 million Dream on Me offered for the chain’s intellectual property, because the only other assets left are employees, empty stores, leases and whatever inventory were. source.
Any company willing to take over will likely have to close stores for a few months so they can replenish their stocks and get them up and running again.
Last month, Overstock.com won the auction for Bed Bath & Beyond’s intellectual property and digital assets with a bid price of $21.5 million. It decided to change the eponymous website name to Bedbathandbeyond.com.
It’s not clear what Dream on Me plans with Buy Buy Baby if it becomes the eventual winner. The company has not returned requests for more information from CNBC.