Soon, Overstock.com will become Bed Bath & Beyond — at least in digital form.
Overstock, which last week paid $21.5 million to acquire the bankrupt retailer’s intellectual property, said on Wednesday that it would start operating its website under the Bed Bath & Beyond name.
The change will roll out in Canada in early July. Starting in August, about a month after the final Bed Bath & Beyond stores in the United States close, customers in the country who visit overstock.com will be redirected to bedbathandbeyond.com.
Overstock’s mobile app and its rewards program will also be rebranded. Company executives plan to eventually bring back Bed Bath & Beyond’s popular wedding registry.
As Overstock, which is based in Midvale, folds the retailer’s assets into its own operations, it is considering renaming its business entirely, said Jonathan Johnson, the company’s CEO. It might settle on Bed Bath & Beyond, he added, but other names are being considered, too.
“I can’t tell you how many times I’ve been asked over the years when we’re going to change the name of Overstock,” said Johnson, who has been at the helm since 2019.
For years, Overstock.com has been trying to find a way to update its image as a liquidator, which is how it started in 1999. The company has since moved away from selling only furniture at basement bargain prices, but ultimately, Johnson said, its name was holding it back in the eyes of consumers.
It’s betting Bed Bath & Beyond’s name can help change that.
“We will probably have both logos for a little bit, but the goal is to transition as quickly as possible to Bed Bath & Beyond,” Johnson said.
When the home-goods retailer filed for Chapter 11 bankruptcy in April, Johnson saw an opportunity for his own company. In 2018, when Patrick Byrne, then Overstock’s CEO, wanted to sell the retail business to focus on cryptocurrency technology, Bed Bath & Beyond was a potential buyer, Johnson said. That deal never happened.
The tables turned when the pandemic hit and Overstock saw its sales surge. Bankers approached the company, suggesting it should purchase Bed Bath & Beyond.
On the other hand, Bed Bath & Beyond was financially battered by the pandemic. Like many retailers, it had to temporarily close its stores and its supply chain buckled as the company sought to keep up with the demand in online shopping. Sales fell drastically as company executives made several merchandising and marketing missteps.
“We’ve been watching and watching, and last year when Bed Bath & Beyond fell on some troubles we started thinking, ‘Gee, if it goes bankrupt, we might have the opportunity to purchase what we like without purchasing what gave us pause before,’” Johnson said. (Overstock did not purchase Bed Bath & Beyond’s store locations or inventory.)
In the week after its bid for Bed Bath & Beyond’s assets became public, Overstock added more than 100,000 bedding and bath items to its site as vendors raced to do business with the company. This was after months of Overstock courting them and making concessions like agreeing to hold inventory in warehouses, a rare move for the online retailer. Now, Johnson said he did not think his company would have to do that to win vendors over.
The acquisition also gives Overstock a trove of customer data. It has information on what Bed Bath & Beyond shoppers purchased online and how frequently they visited the website — a helpful tool as Overstock contends with its own falling sales. On Wednesday, the company said it expected its second quarter revenue to decline in the low 20% range from the year before.
Overstock’s sales peaked in 2021, when more people bought furniture during the height of the pandemic. Its active customers have also been declining, and it said in April it had 4.8 million users. Bed Bath & Beyond’s active customer list for its online shoppers is twice as large.
Overstock expects that its customer count will increase in the coming months, while the average amount that shoppers spend may shrink because the small appliances and home goods that Bed Bath & Beyond was known for are less expensive than the couches and patio tables Overstock normally sells. The online retailer will also spend more on marketing to make consumers aware of its branding changes.
This deal comes at a time when U.S. consumers are spending less on furniture and more on eating out and traveling. Sales at furniture and home furnishing stores fell nearly 3% in the first five months of the year, compared with the same period the year before, according to data from the Commerce Department, which is not adjusted for inflation.
“Opportunities like this come up once in a while, and they come up sometimes when times are tough,” Johnson said. “Will the category still be tough in the short to medium term? I think so, but I think getting all these new customers and rebranding helps us cut through some of that headwind.”
During the integration process, Overstock is planning to hire workers with marketing, merchandising and technology expertise. The company has been trying to recruit former Bed Bath & Beyond employees.
As for the fate of Bed Bath & Beyond’s famed 20% coupon?
“We’ll always be a couponer; we’ll always do the site sales,” Johnson said. “Whether we run at 20% as frequently as Bed Bath did — probably not. But it’ll be there for the beginning.”
This article originally appeared in The New York Times.
