Summary:
- Bed bath & Beyond to acquire The Container Store for $150 million
- More than 100 locations to be rebranded as The Container Store/Bed Bath & Beyond
- Previously planned conversion of all Kirkland’s Home stores to Bed Bath & Beyond Home format appears to be off the table
- Amy Sullivan named president overseeing integration and all of Bed Bath & Beyond’s omnichannel retail brands
New York – After looking to acquire The Container Store in 2024, Bed Bath & Beyond Inc. is now pulling the trigger following Container’s trip through bankruptcy.
This morning, Bed Bath & Beyond Inc. announced a definitive merger agreement to acquire The Container Store for $150 million through a mix of common stock priced at $7.00 per share and senior convertible notes. The company is also acquiring Elfa, a home organization system business based in Sweden, and Closet Works, based in the greater Chicago area. Both had done business in the U.S. through The Container Store. The deal is expected to close this July.
In a letter to shareholders, BBB executive chairman and CEO Marcus Lemonis described the acquisition as a critical step for the company.
“I believe today marks the beginning of our next phase of growth,” he wrote. “This transaction will fill critical gaps in both our retail and home services strategy.”
The more than 100 Container Store locations will be rebranded as The Container Store / Bed Bath and Beyond. The locations, which average 21,000 sq. ft., will offer a combination of merchandise across bed, bath, storage and organization, kitchen, and entertaining.
In addition, the hybrid stores will significantly expand their existing home services offering, Lemonis said. In addition to modular and custom closets, the format will introduce flooring, lighting, kitchen, laundry room, and bathroom cabinetry, “creating a more complete solution, which we believe will help drive both revenue and margin expansion,” Lemonis explained.
The latest transaction arrives five months after BBB inked a $25.8 million agreement to purchase The Brand House Collective, formerly Kirkland’s Home. The original plan called for most, if not all, of Kirkland’s 300-plus stores to convert to smaller format Bed Bath & Beyond Home stores.
A handful of stores were rebranded last year, but in today’s shareholder letter, Lemonis indicated the conversion strategy has been shelved.
“Kirkland’s will operate just over 230 locations nationwide and has been a leader in home décor and seasonal merchandise since 1966,” he wrote.
Amy Sullivan, CEO of the Brand House Collective, will oversee the integration of the new businesses in her new role as president of Bed Bath & Beyond Inc. She will also be responsible for Bed Bath & Beyond Inc.’s omnichannel retail segment – which includes Overstock.com, Bed Bath and Beyond, The Container Store, Kirkland’s, and buybuybaby.com.
“We are focused on disciplined integration, clear execution, and delivering shareholder value. We believe we can deliver at least $40 million of annualized cost savings and productivity efficiencies within 12 to 18 months from fully integrating Kirkland’s Home, The Container Store, Elfa, and Closet Works,” said Lemonis.
In other executive moves:
- Lisa Foley will transition from chief marketing officer of Bed Bath & Beyond Inc./The Brand House Collective to chief operating officer, with responsibility for operational execution across the enterprise.
- Anders Hahn will be named CEO of Elfa, having served as president for the past ten years. He will lead the growth and expansion of Elfa.
- Adrianne Lee, BBB Inc. president and CFO, is leaving the company at the end of April to pursue a new opportunity.
- Brian LaRose will serve as CFO, overseeing financial strategy, capital allocation, and performance discipline.
