Mattress Tub & Past cancels the sale of the Value Plus World Market and intensifies the share buyback
Signage will be displayed outside of a Bed Bath & Beyond Inc. store in Los Angeles, California, United States on Monday, September 19, 2016.
Patrick T. Fallon | Bloomberg | Getty Images
Bed Bath & Beyond announced on Monday that it will sell the Cost Plus World Market to stabilize sales and focus on its core business.
The housewares retailer announced that it has entered into an agreement with Los Angeles-based private equity firm Kingswood Capital Management to buy Cost Plus. There were no terms and conditions announced for the transaction, but expects to close before the fiscal year ends in February 2021.
The company also said it is stepping up share buybacks. It said it approved a $ 150 million share buyback program on top of the $ 225 million program announced in late October. They should be completed by the end of February 2021.
"We have taken targeted steps throughout the year to streamline our portfolio and strengthen our strategic focus on Home, Baby and Beauty & Wellness. Today's announcement marks the completion of that work," said Mark Tritton, CEO of Bed Bath & Beyond, in a statement.
Shares rose about 1.5% in premarket trading early Monday. As of the market close on Friday, they're up 11% this year, bringing the company's market value to $ 2.4 billion.
Bed Bath & Beyond is in the middle of a turnaround under the direction of Tritton, a Target merchandising veteran. The household retailer landed the executive as its new CEO last year, hoping to strengthen its store and e-commerce strategy. At Target, he turned the look of stores on its head, introduced private label products, and helped the company partner with well-known brands like Vineyard Vines and Hunter Boots.
The company has divested other brands to free up capital that it can invest in its eponymous brand. In October, the homeware retailer agreed to sell its Christmas Tree Shops, Linen Holdings business and distribution center in Florence, New Jersey.
In October, Tritton presented a three-year roadmap to get the company back on track. He said it would close stores that are underperforming and focus on gaining market share in key categories like home and baby. More than 10 private labels are to be brought onto the market from spring.
This story evolves and is updated.