Bed Bath & Beyond Nets $250M In Sale-Leaseback Deal
The sale will include the company's Union, New Jersey, headquarters building, along with an unspecified number of retail locations and industrial space.
Currently Bed Bath & Beyond operates about 1,500 stores. The company will lease back the space it is selling, and use the proceeds to facilitate a turnaround plan under new CEO Mark Tritton, the Wall Street Journal reports, as well as retiring debt.
Even before Tritton joined the company in mid-October from Target Corp., Bed Bath & Beyond had been undertaking steps to revive the company's shaky fortunes.
In May, CEO Steven Temares resigned, at least partly in response to pressure from activist investors, CNBC reported. The investors, including Legion Partners Asset Management, Macellum Advisors and Ancora Advisors, previously had put five of their nominees on the company's board of directors.
In early October, the company reported a net loss of $138.8M for its second fiscal quarter of 2019. Also, same-store sales for the quarter were down 6.7% compared to a year earlier. Sale-store sales at the home-goods retailer have been dropping consistently for more than three years.
Company stock edged up on Monday after the news of the sale-leaseback broke, ending the day up by 2.8%. Bed Bath & Beyond stock value has revived somewhat since the ousting of Temares; as recently as August, shares traded as low as $7.40. As of the beginning of 2020, they were trading at over $16.50.
Speaking during the company's most recent earnings call in early October, then-interim CEO and board member Mary Winston said that besides kicking off a major program of store renovations, Bed Bath & Beyond was in the process of renegotiating its leases, aiming to get better terms from its landlords.
At that time, the company said it planned to close about 40 Bed Bath & Beyond stores in the near future, along with 20 other kinds of stores. Other concepts operated by the company include Cost Plus World Market and Buy Buy Baby. The company has also been cutting jobs recently.