Bed Bath & Beyond Makes Equity Investment in The Container Store
The deal is contingent upon The Container Store refinancing its credit facilities.
Management at Beyond, Inc., the parent company of Bed Bath & Beyond and Overstock, is doubling down on brick-and-mortar retail despite the challenges facing the sector. This week, the company announced a $40 million preferred equity investment in The Container Store, which includes a licensing agreement.
The deal is contingent upon The Container Store refinancing its credit facilities. It will grant Beyond 40,000 shares of convertible preferred equity, which can be converted to common equity at a price of $17.25 per share. If fully converted, Beyond would own 40% of The Container Store’s common equity.
As part of the agreement, Bed Bath & Beyond will begin marketing its branded products in The Container Store locations. Additionally, The Container Store will secure a licensing deal to feature its products on Beyond’s e-commerce platform and in retail locations.
“We see tremendous whitespace for The Container Store’s best-in-class, solution-based offerings across the entire Beyond portfolio, particularly within its high-margin Custom Spaces offering through the proprietary Elfa and Preston lines,” said Marcus Lemonis, Executive Chairman of Beyond.
“Through the licensing of the Bed Bath & Beyond brand, The Container Store will enhance its store format and merchandise offerings by incorporating popular Bed Bath & Beyond products, driving improved financial performance while offering customers a more comprehensive product selection for their home and organizational needs.”
The partnership comes after years of declining sales and faltering profits for The Container Store. A report from CNN in May revealed that The Container Store had begun a strategic review of its business after failing to report a profit for the last three years.
Bed Bath & Beyond, meanwhile, transitioned away from brick-and-mortar retail to an e-commerce model following its bankruptcy filing. Its name and digital assets were acquired by Overstock.com in 2023.
As of June 29, The Container Store operated 103 stores in 34 states.