Bed Bath & Beyond (NASDAQ: BBBY) shares rose 1.56% Monday following the announcement that it had sold its non-core business of specialty/import retail stores to private equity firm Kingswood Capital Management.
The agreement includes the company’s 243 brick-and-mortar stores, online platform, two distribution centers as well as the corporate office in Alameda, California. Bed Bath & Beyond has not revealed any further details of the sale, however it said the deal will be finalized by February 2021. Cost Plus World Market will carry on operating as a separate retail brand under Kingswood Capital Management.
Furthermore, the home furnishing chain also authorized a USD150 Million share buyback and revealed that the move would boost its share purchase plans by 22.2% to a total USD825 Million within the next three years.
“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,” Bed Bath & Beyond CEO Mark Tritton said in a statement.
“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,” he added.
Led by Tritton, a Target merchandising veteran, Bed Bath & Beyond is striving to financially recover from the recent economic downturn. Within Target, Tritton had refreshed the stores appearance, introduced private labels and aided in the company’s partnership with brands such as Vineyard Vines and Hunter Boots.
Tritton recently devised a three-year strategy to get the company back on track. Starting by closing underperforming stores and aiming to gain market share for key categories, the company is prepared to launch over 10 private-label brands starting in the spring.