Beyond, Inc. announced two deals in October with The Container Store and Kirkland’s that would pave the way for its brands to gain new footholds in physical stores. For Beyond, whose brands include Overstock, Bed Bath & Beyond, Baby & Beyond, and Zulily, the investment in exchange for these spaces presented an opportunity to expand to real-world locations from digital sales.
Now, Beyond says the Container Store deal may not happen.
Beyond is No. 62 in Digital Commerce 360’s Top 1000 Database of the largest North American online retailers. Meanwhile, The Container Store ranks No. 337. Digital Commerce 360 currently projects Beyond’s total web sales in 2024 will reach $1.45 billion.
Beyond web sales by year
Why Beyond could back out of its Container Store deal
“When we signed the Purchase Agreement, we were optimistic that the Container Store would be able to secure adequate financing to support the business going forward,” explained Marcus Lemonis, executive chairman of Beyond, Inc., in a released statement. “While we continue to believe in The Container Store’s brand and business fundamentals, the proposed financing terms we have reviewed to date fall short of what we believe is necessary to complete the transaction.”
In an update to investors detailing its concerns, Beyond noted that the agreement it reached with The Container Store on Oct. 15 obligated The Container Store to secure financing on terms that Beyond would accept. In addition, Beyond said it would have sole discretion to determine if The Container Store’s financing arrangements were adequate.
“As careful stewards of our shareholders’ capital, we must remain steadfast in ensuring that the terms of any financing package work for both The Container Store and Beyond,” Lemonis stated.
Next steps for Beyond and The Container Store
Citing the financing proposal presented as of Nov. 20, Beyond currently appears skeptical. Specifically, it worries that The Container Store will not be able to reach terms with its lenders for an agreement that will be acceptable. If that remains the case, the deal could collapse entirely.
In the meantime, Beyond said it remains open to “any financing proposals The Container Store may provide.” If agreeable terms do not emerge, then either party may opt to terminate their agreement by Jan. 31, 2025.
Beyond’s Container Store and Kirkland deals came ahead of third-quarter financial results in October as part of a larger strategic shift. As Lemonis said at the time and Beyond emphasized in its update to investors on Nov. 21, the company is focused on becoming an “asset-light ecommerce and affinity data monetization” company. In doing so, it is prioritizing “offering a comprehensive array of products and services that enable its customers to unlock their home’s potential.”
“We are in the process of transforming our asset-light business into an affinity and data monetization model with a strong technology focus, comprised of a collection of brands offered on a comprehensive platform from which customers can unlock value within the four walls of their home and four corners of their property,” Lemonis said in October.
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