(Bloomberg)—Bed Bath & Beyond Inc. agreed to sell Cost Plus World Market, bringing in fresh capital as the home-goods retailer hones its focus on a primary business that got a boost during the pandemic.
The company is selling the chain to Kingswood Capital Management, a Los Angeles-based private equity firm, according to a statement Monday. They didn’t disclose financial terms of the deal, which is expected to close before Bed Bath & Beyond’s fiscal year end in February. Bed Bath & Beyond also approved a new $150 million accelerated share repurchase program.
The sale comes after Bed Bath & Beyond said in July it may generate nearly half a billion dollars through asset divestitures as part of a restructuring program spurred by flagging sales. Bloomberg News reported in June that the makeover might include sales of the Cost Plus World Market and Christmas Tree Shops chains.
Bed Bath & Beyond has attracted droves of quarantined customers as they spruce up their homes during the pandemic. It has coincided with CEO Mark Tritton’s focus on building out its management team, ramping up e-commerce capabilities and focusing on its core business units.
The Cost Plus deal is the latest in a series of “deliberate steps throughout the year to streamline our portfolio and fortify our strategic focus in home, baby and beauty & wellness,” Tritton said in a statement.
Cost Plus began as a store at San Francisco’s Fisherman’s Wharf in 1958 that promoted goods from around the world. It now operates 243 stores selling furniture and other home items. Bed Bath & Beyond, No. 58 in the 2020 Digital Commerce 360 Top 1000, purchased the chain in 2012.
Adidas to decide by March whether to exit Reebok
The company acquired Reebok for $3.8 billion in 2006 and in recent years returned the division to profitability and growth. Bloomberg reported that Adidas was exploring a sale and might start a strategic review in October, citing a person familiar with the matter.
Private-equity firms Permira and Triton have looked at acquiring Reebok, though any plans are at an exploratory stage and may not ripen into an offer, the Financial Times reported last month. German publication Manager Magazin reported in October that interested parties include VF Corp., which owns the Timberland and North Face brands, as well as China’s Anta International Group Holdings.
Since taking over as chief executive officer of Adidas in 2016, Kasper Rorsted has made a priority of fixing Reebok’s long-sluggish performance. He closed underperforming Reebok stores and allowed some licensing deals to expire, cutting sales at the long unloved sporting label but cutting expenses even more.
After Reebok finally regained profitability by early 2019, Rorsted said he wanted to generate sales growth with new footwear lines like the CrossFit Nano and the FloatRide Run. He compared overseeing Adidas and Reebok to being like a parent who loves both his children equally.
While Rorsted had hoped for about 2 billion euros ($2.4 billion) from selling Reebok before the pandemic, he would now be happy with less than that amount, Manager Magazin has said.
Adidas looks like a “clearly motivated seller” and may accept a comparatively low price for the Reebok brand, which would probably have a relatively neutral effect on earnings, John Kernan of Cowen said in an October note.