Bed Bath & Beyond Is Back And It Just Bought The Container Store For $150M | Fast Five Shorts

Bed Bath and Beyond buying the container store for a cool $150 million. Laura, according to Retail Dive, Bed Bath and Beyond, which famously filed for bankruptcy and liquidated all of its physical stores in 2023, has signed a definitive merger agreement to acquire the container store, which itself filed for bankruptcy in December 2024 before emerging as a private company. The transaction also includes the container store's Sweden-based Alpha Home Organization business and Chicago-based Closetworks, giving Bed Bath and Beyond a full home, excuse me, organization and customization ecosystem under one roof. Rather than reopening standalone Bed Bath and Beyond stores, the company plans to roll out dual branded locations, integrating its products into existing container store footprints. Laura, Bed Bath and Beyond and the container store. Is this a case of two rugs making a right? What do you think of this move? Well, I feel like there's two ways to look at it. I think the sort of financial perspective is that these are two brands whose individual power is clearly waning. In the case of Bed Bath and Beyond, well, I guess in both cases, like really at an extreme level. Yeah, has waged. Yeah, we're done. Yeah. Yeah. We're not positive that they even still had stores. You're right. They're past tense brands, almost. So, this is just the consolidation and retail we've been talking about for more than 20 years. It just continues to happen. But I think the risk is that you could look at it as like, well, you know, you got to combine the assets. It looks good financially. But the actual survival of it depends on them creating a differentiated experience. Like why are people going to shop there? Otherwise, they're just rearranging. It's the proverbial rearranging the deck chairs on the Titanic. So, and to me, it just means they have to get really intentional about what they carry about assortment, about pricing, about why you would go to the store. You know, I really, when I think about it, very few retailers and you can correct me if I'm wrong. I feel like very few retailers succeed with an endless in-store aisle today, you know, the beyond in Bed Bath and Beyond. Unless your, you know, Walmart target, Meyer and your whole premise is mass. I feel like TJX's banners are the closest thing, but they have the treasure hunt. They have the pricing. You know, there's there's a reason those stores succeed. You know, bookstores like Barnes & Noble have done, I think, exactly what we're talking about here, where there are category specialists that they've remade their assortment and the experience to make people actually want to go there. So my, I kind of am just left with questions. Are they going to curate the assortment more? Are they going to take advantage of container store? I mean, container stores high end. The stuff is expensive there. Yes. Will they have more services? Yeah. Well, they have more services. So that's my question. I'm sure, you know, from the operator perspective or from the CFO, it's like, well, this looks like a good deal. But from the consumer perspective, I have more questions. Yeah, that's interesting to me because I'll bring in another another experience to light in this conversation, too. You know, when I was heading up home furnishings for for Target.com and also, you know, running some of the omni channel sides of the business, Bed Bath & Beyond was always the retailer that scared me. You know, and it's been funny to watch how it's played out. And the reason I the reason I say that is because Bed Bath & Beyond did what Walmart and what Target at the time couldn't do. They could carry the higher end brands in their stores that would never go into Walmart. And that's something that hasn't been capitalized on really to the extent in terms of creating that truly differentiated mass market home furnishings and experience for the upper cache, which department stores used to do. But that's business has kind of gone out by the wayside. So believe it or not, I mean, I always joke on this show, two wrongs never make a right. But in this case, I kind of think they might, Laura, because I think you mentioned it's a return on assets play, you know, for background. Container store has a hundred stores. Those stores, to your point, tend to be in very desirous locations like they are nice spots where you want to have stores. And Bed Bath & Beyond, for the most part, is acquiring them all at a very significant discount to what it would take to build them out themselves. So that's number one. Number two, I think there's actually synergies between the two product portfolios, too. So I could see, you know, getting more, you know, getting more out of the box, so to speak, by blending and combining. I think that's a real thing that they could do. I don't think that's smoke and mirrors in terms of, you know, how they pitch this in terms of how to combine the product portfolios of two of both entities. And then three, you know, those stores themselves tend to be newer and nicer, more inviting than what we all remember as the Bed Bath & Beyond experience, which was kind of getting to the point of like being trapped in old outdated strip malls and not being that great of an experience. So net net, the merchant in me kind of thinks this is a smart move. And it's from a company that's owned by a CEO, too, you know, good old Marcus, who has a track record of wheeling and dealing and figuring out how to make these things work. So I don't know, Laura, what do you think? Did I sway your thinking in any way? I mean, I think we're still kind of arriving at the same inclusion. Which is that the experience in assortment has to change. You mentioning the old Bed Bath experience with the stuff stacked to the ceiling. I mean, talk about stack at high. It's like insane. Makes me wonder what will happen to the 20% off Bed Bath coupon? Are people, I mean, I was like, I'm a little bit ingest asking about this. But it's a real question. Yeah, because I think the Bed Bath consumer expected that. And I think tells us a lot about the the expectations of price and experience in the store. And maybe it tells us a lot about why we have wound up in this situation in the first place. But it doesn't play with the truthfully, like really high end container store experience. And so I'm curious, you know, does a consumer buy it for lack of a better term? You know, do they buy that this is this is the new one? It's like they go in and say, whoa, this is this is way nicer than I thought it was going to be. And I just I just think that space to your point, I mean, department stores don't do it anymore. Well, I mean, we saw what happened to department stores. Like there's there's a reason. So I I'm yeah, I'm really curious. And I do think we've ultimately kind of arrived at the same conclusion. And maybe the upshot is we think they're going to go higher end. And are people going to want that? Yeah, yeah, it all comes down to what are you giving people right at the end of the day? But I think from an asset's play and, you know, trying to make that idea work. It's as smart as any, but the risk is in can you make the idea work, which is what the investors are, you know, taking into account. Yeah, yeah. Yeah. And I think the nicer locations are meaningful too. That's of course where we're seeing the most success in retail real estate. This is better strip malls, better malls. So that means that the worst ones are just looking even worse. But yeah, I'd rather try to reenliven the bed, bath and beyond brand from the container stores footprint. Yes, the old bed, bath and beyond footprint, right? Which I think is a key point in this story.