Buy Buy Baby draws sale interest amid Bed Bath & Beyond bankruptcy

bed bath behind It is expected to dissolve after the failed retailer declares bankruptcy, but the company’s crown jewel – Buy Buy Buy Baby – may live to see another day.

CNBC has learned that the baby gear retailer is attracting interest from at least two bidders as its parent company, Bed Bath & Beyond, works to auction off its assets and keep some form of its business alive.

Among the interested parties is an unknown bidder, who will purchase the sign as a going concern and keep about 75% of the stores open, according to correspondence obtained by CNBC. Another interested bidder is Babylist, a consumer-oriented baby registry website that wants to buy its brand and domain, that company’s CEO, Natalie Gordon, confirmed to CNBC.

So far, there doesn’t seem to be any interest in buying Bed Bath’s banner and keeping its stores open, but some bidders are interested in buying its digital assets, a person familiar with the matter told CNBC.

According to the correspondent, it’s not clear how much the anonymous bidder is offering to buy Buy Buy Buy Baby, but it was seeking an additional $50 million in capital to support its proposal. This figure provides the first clue as to how much the bidders are willing to pay to snap up the fallen Bed Bath business pieces.

The company’s valuation and intellectual property is not clear. In its most recent quarterly securities filing, Bid Path noted that the intangible value of the trade names and trademarks was only $13.4 million.

In late November, Bed Bath & Beyond had about $4.4 billion in assets and $5.2 billion in debt, court filings show.

Gordon declined to share the number Babylist offered for the Buy Buy brand and domain.

Ankura Capital Advisors, an investment banking firm, is advising the unnamed bidder and said in a May 16 email to its distribution list that the party is looking for a financial partner “to help lead Buybuy Baby out of BBBY’s bankruptcy.”

The client was seeking an additional $50 million in capital along with its existing financial sponsor to back a stall horse bid on the asset, according to correspondence seen by CNBC. A chase bid is an offer on the assets of a bankrupt company that, if accepted, sets a minimum price for future bids.

According to the letter, the mysterious bidder, who was not named in documents seen by CNBC, is “an independent operator with several successful free and retail chains in its portfolio.”

“They are open to different investment structures, from stocks to preferred stock and other forms of start-up capital,” the letter says. “They have committed over 400 hours in really intense diligence and have the team and experience to operate the stores as a going concern.”

In the email, Ancora notes that Buy Buy Baby had about $90 million in stock at the time of filing for bankruptcy and was liquidating about $7.5 million a week at the time the letter was sent.

Babylist bills itself as a destination for all things baby. It made $290 million in revenue in 2022, says it’s profitable and counts more than 1 million new parent sign-ups each year. The company said it considered bidding for the entire chain, including its stores, but ultimately decided it didn’t fit into its overall strategic plan.

Babylist says it started as a destination for the modern dad tired of the same old pink-and-blue landscapes but is now expanding its audience to include everyone in the proverbial village, including the grandparents.

That’s where the Buy Buy Baby – and longtime name recognition – will come in.

Gordon explained that if Babylist’s bid for the brand and domain for the banner is accepted, people searching for Buy Buy Buy Baby and trying to get to the website will be redirected to Babylist.

“We have tremendous confidence with new and expectant parents, but Buy Buy Baby is better known for kind of this older generation,” she said. “As we’re expanding to include the whole family as viewers, we really think it can motivate us like that.”

Gordon said the company chose not to bid for the Buy Buy Baby registry assets because of the speed at which they could become obsolete.

In addition, it appears that the company is already taking a stake in Buy Buy Baby. Since the Bed Bath filing for bankruptcy, Babylist has had nearly 200,000 new sign-ups, which is more new customers than the company typically sees in that time period, she said.

After the bankruptcy of Babies ‘R’ Us and the potential liquidation of Buy Buy Baby, there are a few major retailer families who can turn to that category exclusively for babies. For records, their options include GoalAnd Amazon and Babylist, among others.

This isn’t the first time Buy Buy Buy Baby has seen interest in the sale. The sign has reportedly caught the interest of potential buyers in 2022. It has also caught the attention of activist investor Ryan Cohen, co-founder of Chewy and the president of GameStop, who last March cited the baby gear banner as one of the company’s most valuable pieces, arguing that it could be worth several billion dollars.

In the months before Bed Bath declared bankruptcy, CNBC reported that the company was Courting potential buyers and lenders who will be willing to take over the business and keep its doors open. At the time, potential buyers included private equity firm Sycamore Partners, which was particularly interested in Buy Buy Baby, and Authentic Brands, which had frequented several sales run by bankruptcy retailers like Forever 21.

However, in those filings, the company said it is Confident She could dump her names and stores and she plans to market the business to avoid total liquidation.

“While economic realities necessitate the initiation of a full winding-up of the chain, Bed Bath & Beyond has and will continue to market its business as a continuing business, including the buybuy Baby business,” company CFO and chief restructuring officer Holly Eitlin wrote in a court filing. New Jersey bankruptcy at the time.

In filings, the company confirmed CNBC’s previous reporting and said more than 100 potential investors had previously been involved with Bed Bath Consultants. Potential bidders were asked if they were interested in purchasing the business as a going concern or offering Chapter 11 financing.

The company hoped that the buyer would be willing to buy either Bed Bath & Beyond or Buy Buy Baby as standalone companies, buy the brands’ intellectual property and maybe buy a few of their better-performing stores.

“Bed Bath & Beyond has conducted long-term transactions several times in the past six months, so no one should think that Bed Bath & Beyond will never be able to do it again. On the contrary, Bed Bath & Beyond and its specialists will Make every effort to save all or part of the operations for the benefit of all stakeholders,” Itlin added in the filings.

Further delay in the auction process may indicate a willingness on the part of Bed Bath to entertain the bid from the anonymous bidder, provided the bidder can find more capital.

Ankura declined to comment. Bed Bath & Beyond did not respond to a request for comment.

BedPath previously told CNBC that the auction had been delayed so it could have “more time to ensure it gets the most value.”

Bids for the stalled horses are now scheduled for June 8th at 5pm, and final bids are now scheduled for June 14th. An auction, if needed, is scheduled for June 16.

CNBC channel Lillian Rizzo Contribute to this report.