Beyond’s deal with The Container Store not likely to proceed
A deal that would have given a big — and much-needed — boost to the struggling Container Store is all but dead.
Beyond Inc., the owner of Bed Bath& Beyond, Overstock, Zulily and other online brands, is not moving forward with its planned investment in The Container Store. In October, Beyond announced it would invest $40 million in the storage and organizing products retailer as part of a strategic partnership. But in a release on Wednesday, Beyond said it is not going ahead with the investment since the Container Store been unable to secure new financing on terms commercially acceptable to Beyond.
“When we signed the purchase agreement, we were optimistic that the Container Store would be able to secure adequate financing to support the business going forward," said Marcus Lemonis, executive chairman of Beyond. "While we continue to believe in The Container Store’s brand and business fundamentals, the proposed financing terms we have reviewed to date fall short of what we believe is necessary to complete the transaction.”
Beyond said it will continue to evaluate any financing proposals the Container Store may provide, but if it’s unable to obtain acceptable financing by a Jan. 31, 2025 deadline, it may terminate the agreement.
In an SEC filing on Thursday, the Container Store said it doesn’t expect to satisfy the conditions in the agreement (with Beyond). The retailer also said it is in advanced discussions with lenders to provide additional capital to support its long-term growth and success.
For its second quarter, ended Sept. 28, the Container Store reported its net sales were $196.6 million, down 10.5% from the year-ago period. Comparable store sales decreased 12.5%.
Shortly after Beyond announced its investment in the Container Store, the company entered into an agreement with Kirkland’s that would result in the return of Bed Bath & Beyond brick-and-mortar stores to the U.S. retail landscape. Under the terms of the agreement, Beyond will invest $25 million in a combined debt and equity transaction to strengthen Kirkland’s capital position and fuel growth initiatives.
