Buy Buy Baby draws sale interest amid Bed Bath & Beyond bankruptcy
A Buy Buy Baby store in the Brooklyn borough of New York, US, on Monday, Feb. 6, 2023.
Stephanie Keith | Bloomberg | Getty Images
Bed Bath & Beyond is expected to be dissolved after the failed retailer declared bankruptcy, but the company’s crown jewel – Buy Buy Baby – may live to see another day.
The baby gear retailer is drawing interest from at least two bidders as its parent company Bed Bath & Beyond works to auction off its assets and keep some form of its business alive, CNBC has learned.
The interested parties include an unknown bidder, who would purchase the banner as a going concern and keep about 75% of stores open, according to correspondence obtained by CNBC. The other interested bidder is Babylist, a direct-to-consumer baby registry website that wants to buy its trademark and domain, that company’s CEO, Natalie Gordon, confirmed to CNBC.
So far, it doesn’t appear as if there’s any interest to buy the Bed Bath banner and keep its stores open, but some bidders are interested in buying its digital assets, a person familiar with the matter told CNBC.
It’s not clear how much the unknown bidder is offering to purchase Buy Buy Baby, but it was seeking an additional $50 million in capital to shore up its proposal, according to the correspondence. That figure offers the first clue into how much bidders are willing to pay to snap up the pieces of Bed Bath’s fallen business.
The valuation of the company and its intellectual property is unclear. In its most recent quarterly securities filing, Bed Bath noted the intangible value of trade names and trademarks was just $13.4 million.
As of late November, Bed Bath & Beyond had about $4.4 billion in assets and $5.2 billion in debts, court filings show.
Gordon declined to share the number she offered for Buy Buy’s trademark and domain.
Who are the bidders?
Ankura Capital Advisors, an investment banking firm, is advising the unnamed bidder and said in a May 16 email to its distribution list that the party is seeking a financial partner “to help lead the purchase of Buybuy Baby out of the BBBY bankruptcy.”
The client was seeking the additional $50 million in capital alongside its current financial sponsor to support a stalking horse bid on the asset, according to the correspondence, which was seen by CNBC. A stalking horse bid is an offer on the assets of a bankrupt company that, if accepted, sets a price floor for future bids.
The mystery bidder, who was not named in the documents seen by CNBC, is an “independent operator with several successful, complimentary retail chains in their portfolio,” according to the message.
“They are open to various structures for the investment, from equity to preferred equity and other forms of junior capital,” the message reads. “They have committed over 400 hours in extensive diligence already and have the team and experience to operate the stores as a going concern.”
In the email, Ankura notes that Buy Buy Baby had about $90 million in inventory at the time of…
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