Buy Buy Baby suitors lose interest in keeping stores open as auction nears

Buy Buy Baby, the babe goods retailer owned by Bed Bath & Beyond, has been attracting involvement up of its bankruptcy-run auction. But suitors are cooling connected keeping its stores open.

Earlier this week, Bed Bath & Beyond said successful tribunal papers determination would beryllium a bankruptcy-run auction Wednesday for Buy Buy Baby's assets. Bed Bath had its ain auction this week, with Overstock.com agreeing to bargain for the brand's intelligence spot and integer assets.

Divvying up the company's banners into 2 auctions came arsenic funny buyers proceed to measurement offers for Buy Buy Baby, immoderate that included keeping stores open, according to radical acquainted with the matter, who were not authorized to talk publically owed to the backstage quality of the negotiations.

But arsenic the auction nears, involvement successful keeping Buy Buy Baby's stores unfastened has waned.

In particular, the expenses down moving the stores – leases, overhead costs, salaries – marque it hard to scope profitability if Buy Buy Baby's stores were acquired on with its intelligence property, 1 of the radical said. "There's not a profitable exemplary wherever you lone person 10 stores oregon 40 stores," the idiosyncratic said.

Buy Buy Baby had astir 120 stores, according to tribunal papers.

Direct-to-consumer online registry Babylist has submitted a bid to get immoderate of Buy Buy Baby's assets, similar its domain sanction and trademark, CEO Natalie Gordon told CNBC.

"When we looked astatine the stores and the Buy Buy Baby store footprint, we truly said like, does this accelerate this strategy? ... And the reply was really no," said Gordon. Babylist had earlier told CNBC it had $290 cardinal successful 2022 gross and is profitable.

Gordon added that the size of the wide footprint, the stores themselves and however the stores enactment wouldn't instrumentality Babylist successful the absorption it wanted to go.

Meanwhile, concern steadfast Go Global Retail has been weighing a bid, the radical said. In addition, pre-bankruptcy lender Sixth Street Partners is considering an offer, and could squad up with an e-commerce level to recognition bid connected Buy Buy Baby, the radical said.

Initially, Go Global Retail – which owns the children's deterioration marque Janie and Jack – was funny successful keeping Buy Buy Baby stores open, the radical said. That fig has since dwindled down to astir 20 stores, if immoderate astatine all, they added. The Wall Street Journal earlier reported Go Global Retail's interest.

The imaginable recognition bid from Sixth Street and the e-commerce platform, whose individuality remains unclear, would apt conscionable beryllium for Buy Buy Baby's intelligence property, the radical said. An lawyer for Sixth Street reportedly said successful tribunal the lender was considering a recognition bid for immoderate oregon each of Bed Bath & Beyond's assets if nary others emerged.

Go Global Retail declined to comment. Representatives for Bed Bath & Beyond and Sixth Street didn't instantly respond to comment.

Although it has agelong been considered the crown jewel of Bed Bath & Beyond's portfolio, and attracted funny buyers before and during the bankruptcy process, Buy Buy Baby has inactive been dilatory to nab a caller owner.

While valuations person accrued owed to precocious involvement rates upping the outgo of capital, successful this lawsuit the outgo of keeping Buy Buy Baby's stores unfastened outweighs the upfront bid, immoderate of the radical said.

The worth of Buy Buy Baby's intelligence spot and different assets is unclear.

This week, Bed Bath & Beyond's intelligence spot and integer assets were sold to Overstock.com for $21.5 million. The retailer volition question tribunal support for the merchantability connected Tuesday. Bed Bath & Beyond sought bankruptcy extortion successful April with 360 namesake stores, each of which volition beryllium closed.

But arsenic consumers displacement their spending habits to online buying and experiences specified arsenic question and eating retired aft the aboriginal stages of the Covid pandemic, retail chains similar Bed Bath & Beyond with sprawling footprints and ample stores person suffered.

The intelligence spot of beleaguered retailers – which includes trademarks, websites, lawsuit information and the marque itself – is often the plus that attracts precocious involvement during bankruptcy merchantability processes.

Retailers similar the once-ubiquitous Sports Authority and Toys 'R Us saw their stores liquidated and closed during their bankruptcy proceedings, but their intelligence spot was sold and, successful immoderate cases, revived later.

Toys 'R Us opened 400 pop-up locations wrong Macy's stores successful caller years. It besides has a flagship store astatine the American Dream megamall successful New Jersey. Dick's Sporting Goods acquired Sports Authority's brand, but hasn't reopened stores.