Buy Buy Baby chain’s auction being split up by Bed Bath & Beyond

Bed Bath & Beyond is dividing the bankruptcy-run auction of its Buy Buy Baby chain into two phases amid uncertainty surrounding the sale process. Originally scheduled for 10 a.m. ET on Wednesday, the auction will now only accept bids for Buy Buy Baby’s intellectual property, including its trademark and domain. A separate auction for interested buyers to submit bids and keep Buy Buy Baby’s stores running is planned for Thursday. The first auction will likely choose an initial winner, who can also participate in the second auction. If a higher offer for the entire banner is received in the second auction, it may supersede the winner of the first auction. This decision to split the bidding follows separate sale proceedings for Buy Buy Baby and Bed Bath & Beyond. The move aims to increase bids for the Buy Buy Baby chain, as doubts arise regarding potential offers. The retailer is struggling to secure bids as the auction approaches.

Buy Buy Baby, which is known for selling baby goods such as strollers, clothes, and cribs, has always been regarded as a valuable asset of Bed Bath & Beyond. It attracted interest from various bidders, both before and after its parent company declared bankruptcy. Some potential buyers even considered keeping the store open. However, as the auction draws nearer, interest in keeping the stores operational has decreased. The retailer is facing challenges in receiving bids in an increasingly uncertain sale process.

Bidders interested in purchasing Buy Buy Baby and operating its brick-and-mortar stores and online presence would need to acquire the majority of its 100-plus locations to achieve profitability. The expenses associated with running the stores, such as leases, overhead costs, and salaries, make it challenging to turn a profit if a buyer only acquires a fraction of Buy Buy Baby’s doors along with its intellectual property. According to a source, there is no profitable model when having just a small number of stores. Bed Bath & Beyond has not provided a comment on the matter as of now.

Sixth Street Partners, a pre-bankruptcy lender, could team up with an e-commerce platform and submit a credit bid, putting them in a strong position as a top contender. However, it is uncertain if their offer extends beyond the intellectual property assets. Other interested parties, like Go Global Retail, which owns the children’s wear brand Janie and Jack, have also expressed interest in keeping Buy Buy Baby stores open, although the number of stores they are interested in saving has decreased. Direct-to-consumer online registry Babylist has submitted a bid for Buy Buy Baby’s assets, such as its domain name and trademark, but is not bidding for its physical stores. Overstock.com recently won the auction for Bed Bath & Beyond’s assets, acquiring the banner’s intellectual property and digital assets for $21.5 million, but did not purchase any of the company’s brick-and-mortar stores.