Dive Brief:
- Dream on Me, which recently bought BuyBuy Baby’s brand and digital assets for $15.5 million, was the successful bidder for 11 store leases at a bankruptcy auction for about $1.17 million, court records filed last week show.
- This move could enable some BuyBuy Baby stores to stay open, just a couple of weeks after no buyers came forward for an earlier bankruptcy auction to operate that part of the business. With no takers, the stores were set to close. Dream on Me’s IP acquisition deal did not include any physical store locations.
- But it’s not clear right now what Dream on Me plans to do with the stores, which are in seven states. The company did not immediately respond to a request for comment on Monday from Retail Dive.
Dive Insight:
Dream on Me won 11 out of 20 store leases in the latest auction round. For most leases, court documents show the company is the only bidder. A hearing to OK the sale is set for Friday in U.S. Bankruptcy Court for the District of New Jersey with Judge Vincent Papalia.
Dream on Me wants stores in Connecticut, Massachusetts, New York, New Jersey, Maryland, Delaware and Virginia. But after three months of liquidation sales, BuyBuy Baby’s stores might need to temporarily close for merchandise restocking if Dream on Me intends to reopen and operate them, CNBC reported. As a longtime supplier for BuyBuy Baby, Dream on Me could be well positioned to do this.
BuyBuy Baby is part of Bed Bath & Beyond. The home goods retailer bought BuyBuy Baby in 2007 for $67 million and $19 million in debt repayment. At the time of the bankruptcy filing, BuyBuy Baby had 120 stores. The now-bankrupt retailer has sought to sell its most valuable business assets in pieces to extract the maximum value for stakeholders.
Overstock won Bed Bath & Beyond’s IP auction in June with a $21.5 million bid. Later that month, Overstock said it was rebranding itself to Bed Bath & Beyond to capitalize on the latter company’s brand recognition with consumers. It appears Dream on Me is taking the same approach.
"The loyalty and trust that customers have in BuyBuy Baby is extraordinary, and we are committed to continue honoring their legacy of offering quality and solution-oriented products at parent-friendly prices,” Mark Serure, CEO of the Dream on Me family of companies, said in a July 14 announcement about the IP acquisition.
Dream on Me said its experience and dedication to innovation and customer satisfaction position the company to revitalize BuyBuy Baby. “[Dream on Me] intends to use its deep understanding of the growing needs of modern families, wealth of expertise, resources, and fresh perspective to create an extraordinary retail experience that captures the essence of quality, convenience, and the personal touch that customers have come to expect from BuyBuy Baby,” the company said in the announcement.
Serure concluded by saying Dream on Me wants to keep BuyBuy Baby the go-to destination for parents and families who want quality baby and child-focused products and excellent customer service. The company’s other brands include Evolur, Sweetpea Baby, Hannah & Sophia and TailZzz.
But some stakeholders in the bankruptcy process may likely walk away empty handed.
As part of a bankruptcy reorganization plan filed just before midnight Thursday, shareholders’ “allowed interest in [Bed Bath & Beyond] shall be canceled, released and extinguished.” That could mean shareholders won’t get their money back if the court approves the reorganization plan.
