Buy Buy Baby auction canceled but bidders still interested

“Store Closing” signs at a Buy Buy Baby store within the Brooklyn borough of Recent York, on Monday, Feb. 6, 2023.

Stephanie Keith | Bloomberg | Getty Images

Bed Bath & Beyond canceled a Friday auction for its Buy Buy Baby chain since it did not secure a buyer willing to maintain its stores running – nevertheless it’s not quite over for the child retailer just yet, CNBC has learned.

Bidders backed out of the auction after they determined the chain was now not value buying because its value had deteriorated a lot, but there are parties still occupied with its assets, in keeping with two people near the matter who weren’t authorized to debate it publicly.

While it could be unusual, Bed Bath & Beyond could still accept a bid for Buy Buy Baby early next week. The chain’s fate won’t be definitively determined until Tuesday, when a court hearing is scheduled to approve the sale of Buy Buy Baby’s mental property to Dream on Me Industries. The corporate, slightly known Recent Jersey-based retailer and one in every of Buy Buy Baby’s former suppliers, agreed to purchase its trademark and digital assets for $15.5 million if no higher bids arise.

Once considered the crown jewel of Bed Bath & Beyond’s now-failed empire, the child chain has been within the midst of liquidation sales at its 120 stores since its parent company filed for bankruptcy protection April 23. 

Because the auction process dragged on and Buy Buy Baby’s inventory dwindled, so did its value. Nearly three months into close out sales, there’s little left to bid on besides the brand’s mental property, one in every of the people said.

“A lot of the value was within the IP,  especially at this point in the method. One can imagine that three months ago, after they were fully functioning stores operating and running, which may not be the case,” said the person.

For the past several weeks, Bed Bath & Beyond has repeatedly pushed back and split up the bankruptcy-run auction process for Buy Buy Baby so it could secure higher bids and discover a firm that was willing to maintain stores running. 

It scheduled an auction solely for Buy Buy Baby’s mental property last week and announced Dream on Me because the winner. 

Bed Bath & Beyond scheduled a separate auction for Friday during which buyers could bid on the chain as a going concern and noted Dream on Me’s bid could possibly be superseded in the event that they received the next sale price. 

Nonetheless, it canceled the auction late Thursday when those bids did not materialize, a spokesperson said in an announcement. 

Go Global Retail, a brand investment firm that is represented by Ankura Capital Advisors, had been occupied with keeping about 75% of Buy Buy Baby’s stores running and had earlier sought a further $50 million in capital to shore up its bid, CNBC previously reported. The firm is already in the child business and currently owns kid’s apparel company Janie and Jack. It declined to comment when reached by CNBC.

If the auction had been held, bids likely wouldn’t have been much higher than the $15.5 million Dream on Me offered for the chain’s mental property since the only other assets leftover were its employees, empty stores, leases and whatever inventory was left, said the source. 

Any firm that is willing to take over will likely should shut the stores down for a few months so that they can restock and get them back up and running.

Last month, Overstock.com won the auction for Bed Bath & Beyond’s mental property and digital assets with a bid price of $21.5 million. It decided to alter its eponymous website name to Bedbathandbeyond.com.

It shouldn’t be clear what Dream on Me plans to do with Buy Buy Baby if it finally ends up the last word victor. The corporate didn’t return requests for more information from CNBC.