Buy Buy Baby draws sale interest in Bed Bath & Beyond bankruptcy, one bidder looks to save stores

Bed Bath & Beyond is expected to beryllium dissolved aft the failed retailer declared bankruptcy, but the company's crown jewel — Buy Buy Baby — whitethorn unrecorded to spot different day. 

The babe cogwheel retailer is drafting involvement from astatine slightest 2 bidders arsenic its genitor company, Bed Bath & Beyond, works to auction disconnected its assets and support immoderate signifier of its concern alive, CNBC has learned. 

The funny parties see an chartless bidder, who would acquisition the banner arsenic a going interest and support astir 75% of stores open, according to correspondence obtained by CNBC. The different funny bidder is Babylist, a direct-to-consumer babe registry website that wants to bargain its trademark and domain, that company's CEO, Natalie Gordon, confirmed to CNBC.

So far, it doesn't look arsenic if there's immoderate involvement successful buying the Bed Bath banner and keeping its stores open, but immoderate bidders are funny successful buying its integer assets, a idiosyncratic acquainted with the substance told CNBC.

It's not wide however overmuch the chartless bidder is offering to acquisition Buy Buy Baby, but it was seeking an further $50 cardinal successful superior to enactment up its proposal, according to the correspondence. That fig offers the archetypal hint into however overmuch bidders are consenting to wage to drawback up the pieces of Bed Bath's fallen business.

The valuation of the institution and its intelligence spot is unclear. In its astir caller quarterly securities filing, Bed Bath noted the intangible worth of commercialized names and trademarks was conscionable $13.4 million. 

As of precocious November, Bed Bath & Beyond had astir $4.4 cardinal successful assets and $5.2 cardinal successful debts, tribunal filings show. 

Gordon declined to stock the fig Babylist offered for Buy Buy's trademark and domain. 

Ankura Capital Advisors, an concern banking firm, is advising the unnamed bidder and said successful a May 16 email to its organisation database that the enactment is seeking a fiscal spouse "to assistance pb the acquisition of Buybuy Baby retired of the BBBY bankruptcy."

The lawsuit was seeking the further $50 cardinal successful superior alongside its existent fiscal sponsor to enactment a stalking equine bid connected the asset, according to the correspondence, which was seen by CNBC. A stalking equine bid is an connection connected the assets of a bankrupt institution that, if accepted, sets a terms level for aboriginal bids.

The enigma bidder, who was not named successful the documents seen by CNBC, is an "independent relation with respective successful, complimentary retail chains successful their portfolio," according to the message.

"They are unfastened to assorted structures for the investment, from equity to preferred equity and different forms of inferior capital," the connection reads. "They person committed implicit 400 hours successful extended diligence already and person the squad and acquisition to run the stores arsenic a going concern." 

In the email, Ankura notes that Buy Buy Baby had astir $90 cardinal successful inventory astatine the clip of the bankruptcy filing and had been liquidating astir $7.5 cardinal play astatine the clip the connection was sent. 

Babylist bills itself arsenic a destination for each things baby. It saw $290 cardinal successful gross successful 2022, says it's profitable and counts implicit a cardinal caller genitor sign-ups each year. The institution said it considered putting successful a bid to bargain the full chain, including its stores, but it yet decided it didn't acceptable into its wide strategical plan. 

Babylist says it started retired arsenic a destination for the modern genitor who is bushed of the aforesaid aged pinkish and bluish landscapes but that it's present moving to grow its assemblage to each members of the proverbial village, including grandparents. 

That's wherever Buy Buy Baby — and its long-held sanction designation — would travel in. 

If Babylist's bid to get the banner's trademark and domain were to beryllium accepted, radical who hunt for Buy Buy Baby and effort to entree the website would beryllium redirected to Babylist, Gordon explained. 

"We person tremendous spot with caller and expecting parents but Buy Buy Baby is overmuch amended known with benignant of that older generation," she said. "So arsenic we're expanding to the full household arsenic an audience, we truly deliberation it tin jumpstart america successful that way." 

Gordon said the institution opted retired of putting successful an connection for Buy Buy Baby's registry assets due to the fact that of however rapidly they tin go stale. 

Plus, the institution already appears to beryllium taking stock from Buy Buy Baby. Since Bed Bath's bankruptcy was announced, Babylist has had astir 200,000 caller sign-ups, which is simply a higher fig of caller customers than the institution usually sees successful that play of time, it said. 

Following the bankruptcy of Babies 'R' Us and the imaginable liquidation of Buy Buy Baby, determination are fewer large retailers families tin crook to that cater exclusively to the babe category. For registries, their options see Target, Amazon and Babylist, among others.

Babylist doesn't run immoderate accepted brick-and-mortar locations but plans to unfastened its archetypal showroom successful Beverly Hills, California, this summer.

This is not the archetypal clip Buy Buy Baby has seen merchantability interest. The banner reportedly drew involvement from imaginable buyers successful 2022. It besides caught the attraction of activistic capitalist Ryan Cohen, co-founder of Chewy and seat of GameStop, who past March pointed to the babe cogwheel banner arsenic 1 of the astir invaluable pieces of the company, arguing it could beryllium worthy respective cardinal dollars.

At the time, Cohen pushed for a spinoff oregon sale. 

Buy Buy Baby has remained a agleam spot successful Bed Bath & Beyond's different dismal net reports successful caller years.

In Bed Bath's fiscal 2021 vacation quarter, same-store income for Bed Bath & Beyond stores declined 15% — but Buy Buy Baby's same-store income grew by debased azygous digits.

And much recently, during Bed Bath's fiscal 3rd 4th of 2022, which ended Nov. 26, income declines were reported crossed the company, but Buy Buy Baby's gross declines outperformed Bed Bath's. During the quarter, comparable income astatine the Bed Bath banner declined 34%, portion astatine Buy Buy Baby, they declined successful the debased 20% range, the institution said astatine the time. 

When Bed Bath & Beyond locations were shuttering crossed the state arsenic portion of the company's efforts to halt the fiscal bleeding, it opened much Buy Buy Baby locations successful the hopes the stores would boost sales. 

As of precocious April, 120 of the stores were inactive open, alongside 360 of Bed Bath's namesake stores, the institution said previously. 

Bed Bath & Beyond's bankruptcy auction has been delayed twice, which could bespeak the institution is inactive trying to drum up involvement for its assets. 

In the months earlier Bed Bath declared bankruptcy, CNBC reported the institution was courting prospective buyers and lenders that would beryllium consenting to instrumentality connected the institution and support its doors open. At the time, the imaginable buyers included backstage equity steadfast Sycamore Partners, which was peculiarly funny successful Buy Buy Baby, and Authentic Brands, which has frequented galore bankruptcy-run income for retailers specified arsenic Forever 21.

In the end, the process proved unsuccessful and produced "limited involvement successful a viable connection to get the Debtors' assets," according to tribunal records filed successful the company's bankruptcy lawsuit successful April.

Still, successful those filings, the institution said it was confident it could offload its names and stores and said it planned to marketplace the concern to debar outright liquidation. 

"While the commencement of a afloat concatenation wind-down is necessitated by economical realities, Bed Bath & Beyond has and volition proceed to marketplace their businesses arsenic a going-concern, including the buybuy Baby business," the company's main fiscal serviceman and main restructuring serviceman Holly Etlin wrote successful a declaration to New Jersey's bankruptcy tribunal astatine the time. 

In the filings, the institution confirmed CNBC's anterior reporting and said much than 100 imaginable investors had been engaged by Bed Bath's advisors. Prospective bidders were asked if they were funny successful buying the concern arsenic a going interest oregon providing Chapter 11 financing. 

The institution had been hoping a purchaser would beryllium consenting to acquisition either Bed Bath & Beyond oregon Buy Buy Baby arsenic standalone businesses, bargain the brands' intelligence spot and possibly instrumentality connected a fewer of their amended performing stores.

"Bed Bath & Beyond has pulled disconnected agelong changeable transactions respective times successful the past six months, truthful cipher should deliberation Bed Bath & Beyond volition not beryllium capable to bash truthful again. To the contrary, Bed Bath & Beyond and its professionals volition marque each effort to salvage each oregon a information of operations for the payment of each stakeholders," Etlin added successful the filings.

Further delays successful the auction process could awesome willingness connected Bed Bath's portion to entertain the connection from the chartless bidder, provided the bidder tin find much capital.

Ankura declined to remark connected the matter. Bed Bath & Beyond didn't respond to a petition for comment. 

Bed Bath antecedently told CNBC the auction had been delayed truthful it could person "more clip to guarantee the astir value-maximizing transaction is achieved." 

Stalking equine bids are present owed connected June 8 astatine 5 p.m., and last bids are present owed connected June 14. An auction, if necessary, is scheduled for June 16. 

— CNBC's Lillian Rizzo contributed to this report.