Buybuy Baby Brings Back Brick-And-Mortar Under New Parent
Months after its former parent company filed for bankruptcy, Buybuy Baby is re-entering the real estate market and reopening old stores.
Dream On Me Industries, which purchased Buybuy Baby in July, has reopened 11 previously closed suburban stores along the Eastern Seaboard, from Virginia to Massachusetts. It plans to open over 100 new locations in the U.S. within the next three years and has its eye on eventually expanding internationally, according to The Wall Street Journal.
On top of that, Buybuy Baby is looking at up to 200 new locations to test smaller-footprint stores, according to the retailer.
In April, Bed, Bath & Beyond filed for a Chapter 11 restructuring and closed all of its stores, including 360 Buybuy Baby locations. In July, the company sold Buybuy Baby's intellectual property and 11 leases to competitor Dream On Me for $15.5M.
The company is betting that expecting parents will favor the in-store shopping and registry experience over going online. Even as e-commerce challenges brick-and-mortar stores, the in-person retail market has managed to stay strong. According to Capital One research, 45% of consumers primarily shop in person.
Meanwhile, retail real estate is tightening. Construction deliveries fell 28% between the second and third quarters, according to CBRE, which predicts that 2023 will conclude as the fourth consecutive year of record-low development.
Retail availability fell to an 18-year low of 4.8% in Q3, which has allowed retail REITs to raise rents and expand their outlook for the rest of the year.
Retail might experience more headwinds in the coming months, however. CNN reports that consumer spending might dwindle. Shoppers are grappling with the highest housing costs in 40 years, U.S. consumer credit card debt is over $1T, student loan payments have resumed and lockdown-era windfalls are slowing. Meanwhile, high inflation rates and interest rates haunt shoppers.
Despite all this, the holiday season has been surprisingly strong. In-store Black Friday attendance rose 2% to 5% from last year, and $9.8B was spent online, a 7.5% increase from 2022, according to Forbes. Shopping from Black Friday to Cyber Monday set a pandemic-era record, the National Retail Federation reported.
