New owner plans rebirth of Buy Buy Baby

Company that also bought Bed Bath & Beyond eyes opening stores for defunct chains

According to Linda Moss at CoStar News, "The parent of Overstock is partnering with retailer Kirkland's to revive Buy Buy Baby as a brick-and-mortar chain as well as rebooting its former sister company Bed Bath & Beyond.

Murray, Utah-based Beyond, formerly known as Overstock, on Monday said it had entered into an asset-purchase agreement for the global rights to the Buy Buy Baby brand for $5 million. The acquisition includes certain assets, databases, domains, intellectual property, vendor relationships, and content related to the name.

Beyond is already partnering with Brentwood, Tennessee-based Kirkland's, which has 328 home-decor-and-furnishings stores in 35 states, to relaunch Bed Bath & Beyond. That initiative includes Kirkland's piloting up to five standalone small-format Bed Bath & Beyond stores. It also appears to be the game plan for Buy Buy Baby, including potentially rolling out brick-and-mortar locations but also featuring high-tech twists such as the digital representation of assets, known as tokenization, used in cryptocurrency markets.

"Alongside our omnichannel partner, Kirkland’s, we collectively believe the Buy Buy Baby brand has a strong future both online and in brick-and-mortar," Beyond said in a statement. "Kirkland’s will have full flexibility, from integrating Buy Buy Baby into Bed Bath & Beyond stores, to opening standalone locations under each legacy banner. The Buy Buy Baby in-store experience will be a destination for parents, offering curated selections of the best brands for every stage of childhood."

Kirkland's and Beyond didn't respond to emails from CoStar News on Tuesday seeking comment.

Reviving the defunct

Companies have taken different tacks in their attempts to resurrect defunct chains, including forging partnerships. New York-based WHP Global acquired both the Toys R Us and Babies R Us brands in 2021, following the demise of both chains. The company has now opened flagship stores for both Toys R Us and Babies R Us at the American Dream megamall in East Rutherford, New Jersey. WHP also struck deals to launch store-in-store Toys R Us shops at hundreds of Macy's stores and is rolling out Babies R Us boutiques in Kohl's department stores. But a prior attempt to salvage Buy Buy Baby failed.

Bed Bath & Beyond filed for Chapter 11 in 2023, resulting in the liquidation of not only its namesake home-goods chain but also the shutdown of Buy Buy Baby, which sells apparel and other goods for babies and kids. New Jersey-based Dream on Me Industries acquired the IP rights for Buy Buy Baby and relaunched the chain, opening just under a dozen stores. But it closed those locations at the end of last year.

In turn, Beyond acquired the IP rights for Bed Bath & Beyond in June 2023, and last October it announced it was partnering with Kirkland's to revive the brand. That initiative includes testing the handful of small-format "neighborhood" Bed Bath & Beyond stores.

Trying tokenization

The Buy Buy Baby deal "is part of Beyond’s strategy to build a powerhouse of different brands," according to Neil Saunders, a retail analyst and managing director for analytics firm GlobalData.

"Buy Buy Baby gives them access to a specialist brand in the baby space, which they can integrate into other businesses and partnerships," Saunders said in an email to CoStar News. "The purchase price is modest, so they will be hoping to generate a return. That said, Buy Buy Baby has fallen off the radar of a lot of consumers, so Beyond is going to have to work hard to monetize it and grow revenue."

Beyond on Monday also unveiled plans to use tokenization and blockchain technology for the Buy Buy Baby relaunch.

Beyond and tZERO, with its Security and Exchange Commission-regulated special purpose broker dealer license, are exploring the tokenization of a portion of the Buy Buy Baby intellectual property. Beyond said it is considering two separate offerings on the tZERO platform.

"The first would potentially be a digital dividend available to current holders of Beyond as of a specific record date, while the second would be an offering to new investors interested in owning a share of the intellectual property," the company said. "In both cases, our goal is for the token to provide a revenue share on the omnichannel revenue generated by the brand, along with loyalty benefits across the Beyond platform."

Baby blockchain

Beyond also sees "an unprecedented opportunity to leverage tZERO’s blockchain technology and the Buy Buy Baby assets to build the first ledger that records all significant life events, starting from birth records, medical records, and life milestones to educational records, financial products, insurance, and purchases," according to the company.

That initiative, dubbed “LifeChain,” will "integrate the consumer’s financial and digital assets into a single, secure digital wallet, supported by Salesforce and its Agentforce technology," Beyond said.

"Bed Bath & Beyond and Buy Buy Baby have historically been synonymous with supporting families, their homes, and all of life’s milestones," Beyond Executive Chairman Marcus Lemonis said in a statement. "Our goal is to go beyond the traditional omnichannel mindset, focusing on the four corners of the property, and the four walls of the home."

In a securities filing, Beyond said it will pay a 1% revenue share on e-commerce sales and 0.5% on brick-and-mortar store sales generated by it and its affiliates, and its licensees and franchisees, on the sale of merchandise at Buy Buy Baby-branded stores and e-commerce platforms, as well as the sale of Buy Buy Baby-branded merchandise at other stores or on other e-commerce platforms, beginning in 2026.

As part of their strategic partnership, Beyond is slated to invest $25 million through a combined debt and equity transaction in Kirkland's. Beyond also had an agreement to invest $40 million in The Container Store, which in turn would have Bed Bath & Beyond shops within its stores. But that deal fell through because of The Container Store's financial woes, which included it filing for Chapter 11 and emerging as a private company.

E-commerce focused Beyond owns or has ownership interests in various retail brands, including not only Bed Bath & Beyond and Overstock but Zulily."

The reopening of Buy Buy Baby stores across the nation could have notable implications for property taxes, particularly by occupying previously vacant retail spaces. This development could generate increased tax revenue for municipalities and contribute to economic revitalization in areas affected by retail closures.

Property Tax Implications

Increased Property Values: Vacant retail properties often experience declining assessed values due to prolonged inactivity and disrepair. The reoccupation of these spaces by Buy Buy Baby stores could lead to an increase in property values, thus boosting the tax base for local governments.

Higher Tax Revenue: Local governments rely on property taxes as a primary revenue source. When a formerly vacant commercial property becomes active again, its assessed value may rise, leading to higher tax collections. Additionally, new leases or ownership changes may prompt reassessments, further increasing tax revenue.

Economic Growth and Secondary Effects: Beyond direct property tax implications, the reopening of these stores could stimulate surrounding businesses, leading to increased commercial activity. Increased foot traffic may encourage other retailers, restaurants, and service providers to open nearby, further strengthening the local economy and generating additional tax revenue.

Reduction in Vacancy Rates: High commercial vacancy rates can lead to depressed property values and reduced tax revenue. By repopulating empty spaces, Buy Buy Baby’s revival could help stabilize and enhance the tax contributions of commercial districts.

Infrastructure and Public Services Considerations: While increased tax revenue benefits local governments, the reopening of multiple retail locations may also require additional public services such as traffic management, law enforcement, and maintenance. Local municipalities must balance the tax benefits with any added costs associated with supporting commercial growth.

Broader Impact

The return of Buy Buy Baby stores aligns with a broader trend of reviving defunct retail brands, as seen with Toys R Us and Bed Bath & Beyond. This retail resurgence highlights an adaptive reuse of commercial properties, which may influence future zoning policies and urban planning decisions. Municipalities may also consider offering tax incentives to encourage similar redevelopments of abandoned retail spaces.

In conclusion, the reopening of Buy Buy Baby stores could play a crucial role in revitalizing local economies by boosting property values, increasing tax revenue, and fostering economic activity. Local governments and property tax professionals should closely monitor these developments to assess their fiscal impact and potential policy adjustments.