Bed Bath & Beyond in deal to sell Cost Plus World Market
Bed Bath & Beyond has found a buyer for its last remaining non-core banner.
The home good retailer has entered into an agreement to sell Cost Plus World Market to Kingswood Capital Management, a Los Angeles-based private equity firm. The financial terms of the deal were not disclosed.
The agreement includes 243 stores, the Cost Plus digital business, two distribution facilities and a corporate office located in Alameda, Calif. It is expected that Cost Plus will continue to operate as a stand-alone retail brand.
During the past several months, Bed Bath & Beyond has shed its non-core businesses in order to focus its attention on its namesake and Buybuy Baby brands. In November, the company completed the sale of Christmas Tree Shops, Linen Holdings and a distribution center in Florence, New Jersey.
"We've taken deliberate steps throughout the year to streamline our portfolio and fortify our strategic focus in home, baby and beauty & wellness, and today's announcement represents the conclusion of this work,” said Mark Tritton, president and CEO, Bed Bath & Beyond. “In all, we have unlocked significant value from the divestiture of 5 business concepts this year, and we have also meaningfully reduced our lease liability and overall debt. These actions provide greater financial flexibility to support our digital first, omni-always transformation and our commitment to deliver sustainable total shareholder return."
Bed Bath & Beyond is in the middle of a turnaround effort led by Tritton, who took the reins as CEO in late 2019. He recently laid out a three-year strategy to get the chain back on track and accelerate its omnichannel transformation.
The Cost Plus transaction is expected to close prior to Bed Bath & Beyond's fiscal year-end in February 2021. Both companies have agreed to a transition service agreement following the close of the transaction to help ensure business continuity.
Additionally, Bed Bath & Beyond approved a new $150 million accelerated share repurchase program (ASR), which will be in addition to the $225 million ASR announced on October 28, 2020. It plans to complete them by the end of February 2021.
“We are pleased to announce the approval of a second ASR program which reinforces our capital allocation principles to drive shareholder value creation and reflects a strong liquidity position and confidence in our strategic growth plan,” Tritton said.