February 21, 2024

On August 25, 2022, in New York, a customer holds a Buy Buy Baby shopping bag.

Gabby Jones | Bloomberg | Getty Images

Bed bath and others The retailer is splitting the auction of its Buy Buy Baby chain in receivership into two phases as the retailer struggles to secure bids in what is currently a doubtful sale.

All of Buy Buy Baby’s assets were scheduled to go under the hammer on Wednesday at 10 a.m. ET. Bids are now only being accepted for the chain’s intellectual property, including its trademark and domain name, according to people familiar with the matter.

The defunct home furnishings retailer plans to hold a separate auction on Thursday where buyers can submit bids to keep Buy Buy Baby and its stores afloat, said the people, who were not authorized to speak publicly on the matter.

An initial winner may be chosen in an intellectual property auction on Wednesday. This bidder and other bidders can participate in the second auction. If Bed Bath & Beyond receives a higher bid for the entire banner than for the intellectual property, that bidder could be selected and replace the winner of Wednesday’s auction, the people said.

The retailer held separate sales procedures for its “Buy Buy Baby” and “Bed Bath & Beyond” banners before deciding to bid separately.

The move is considered unusual in the bankruptcy world, but Bed Bath & Beyond could boost bids for its Buy Buy Baby chain amid growing doubts about what offers, if any, will be made, some of the people said.

The banner, which sells baby accessories such as strollers, clothes and cribs, has long been considered the crown jewel of Bed Bath & Beyond properties. It has attracted interest from numerous bidders both before and after its parent company declared bankruptcy. Some potential buyers considered keeping the store open.

But as the auction looms, interest in keeping the stores alive has waned, with retailers struggling to secure bids amid an increasingly uncertain sales process, some people familiar with the matter said.

A Buy Buy Baby retail store in New York on August 25, 2022.

Gabby Jones | Bloomberg | Getty Images

Bidders interested in buying Buy Buy Baby and operating its brick-and-mortar stores and online business would need to buy most of its more than 100 stores to be profitable.

If buyers bought only a fraction of Buy Buy Baby’s merchandise and its intellectual property, the costs of running the store, such as rent, overhead, and wages, would make it difficult to turn a profit.

“It’s just 10 or 40 stores that don’t make a profit,” a person familiar with the matter previously told CNBC.

Bed Bath & Beyond did not respond to CNBC’s request for comment.

The credit bid from pre-bankruptcy lender Sixth Street Partners, which may partner with the e-commerce platform, is considered the top contender, some of the people said. It was not immediately clear whether the offer would extend beyond intellectual property assets. Sixth Street Partners did not respond to CNBC’s request for comment.

Go Global Retail, which owns children’s clothing brand Janie and Jack, initially intended to keep Buy Buy Baby stores open, but the number of stores it intends to keep has been reduced to about 20, if any, CNBC previously reported. The report said.

CEO Natalie Gordon previously told CNBC that Babylist, a direct-to-consumer online registry, had submitted a bid to acquire some of Buy Buy Baby’s assets, such as its domain name and trademark, but opted not to participate in the sale of its stores. bid.

Earlier this month, Overstock.com won the auction of the Bed Bath & Beyond assets and bought the intellectual property and digital assets of the banner for $21.5 million. The digital retailer did not agree to buy any of Bed Bath & Beyond’s stores.