Bed Bath & Beyond, 1-800-Flowers execute sale of startup
Bed Bath & Beyond Inc. has worked out a sale of its PersonalizationMall.com subsidiary to 1-800-Flowers.com for $245 million.
The struggling home décor retailer initially reached a deal to sell the pure-play retailer of customized merchandise and gifts to 1-800-Flowers for $252 million in February 2020. However, Bed Bath & Beyond filed a lawsuit against 1-800-Flowers in April 2020 when the specialty flower and gift retailer cited the COVID-19 pandemic in an attempt to delay the purchase. As part of the sale agreement, the litigation will be dismissed.
PersonalizationMall.com will continue to provide product and personalization services to the Bed Bath & Beyond and buybuy Baby retail banners. Bed Bath & Beyond initially acquired the startup for approximately $190 million in cash in November 2016.
The product offering of PersonalizationMall.com includes personalization processes such as sublimation, embroidery, digital printing, engraving and sandblasting. PersonalizationMall.com will operate as a wholly owned subsidiary of 1-800-Flowers.
The acquisition provides 1-800-Flowers with several assets, including a newly renovated, leased 360,000-sq.-ft. production and distribution facility; a customer database consisting of both consumers and corporate accounts; and a product development, sourcing, merchandising and marketing team. According to 1-800-Flowers CEO Chris McCann, the addition of PersonalizationMall.com will increase his company’s annual revenue run rate to more than $1.6 billion and be accretive to its results for fiscal 2021.
"The completion of this transaction is an important milestone in our plan to simplify our portfolio and rebuild authority in our core market,” said Mark Tritton, CEO of Bed Bath & Beyond. “Since announcing our intention to divest PersonalizationMall.com back in February 2020, we have made significant progress in our efforts to optimize growth within home, baby, beauty and wellness, assembling a world class leadership team, restructuring our operations and introducing new services like buy-online-pickup-in-store and contactless curbside pickup."
“The addition of PersonalizationMall.com to our unique business platform, including our all-star family of brands, significantly enhances our ability to help our customers engage and stay connected with the important people in their lives,” said 1-800-Flowers’ McCann. “Like our leading brand positions in gourmet food and flowers, the broad assortment of products and customization processes offered by PersonalizationMall.com makes it a leader in the growing market for personalized gifts.”
Citigroup Global Markets, Inc. served as exclusive financial advisor and Cahill Gordon & Reindel LLP served as legal counsel to 1-800-Flowers.com on the acquisition of PersonalizationMall.com.