Bed Bath & Beyond is selling personalized gift e-retailer PersonalizationMall.com to 1-800-Flowers.com for $252 million in cash, according to press releases from the companies.
The flower and gifts site will get the PersonalizationMall.com website as well as a "new, state-of-the-art 360,000 square foot production and distribution facility in Bolingbrook, Illinois," according to that company’s press release. PersonalizationMall.com will become a wholly owned subsidiary of 1-800-Flowers.com, Inc.
The deal is subject to customary closing conditions, including scrutiny under antitrust regulations, according to the companies, which say they have signed a definitive agreement.
Mark Tritton last fall left his post as Target's top merchandising exec to take on the chief executive spot at Bed Bath & Beyond, and the thorny job of turning it around. That will likely entail unwinding at least some previous efforts from the tenure of Steven Temares, who left amid pressure from activist investors highly critical of his oversight.
The struggling home goods retailer bought the gifts site for $190 million in cash a little more than three years ago, and apparently made something of it. It's unloading the site for more than it paid, and 1-800-Flowers.com CEO Chris McCann said in a statement that the custom-gift site has seen "steady financial growth for the past several years, with revenues reaching more than $150 million in its most recent year" and the company expects it to "be accretive to our top and bottom-line results in fiscal 2021."
Wedbush analysts led by Seth Basham hailed the move and the sale price, saying in emailed comments that the deal exceeds their expectations.
In his own statement, Tritton characterized the sale as streamlining the company's operations and hinted there may be more of that to come. "This transaction is another important step towards simplifying our portfolio and deepening our focus on our core Home, Baby and Beauty businesses," he said. The company also said it continues to work with outside advisers "to optimize the Company's portfolio of retail concepts and owned real estate."
Further unloading could potentially include, along with real estate assets, selling Bed Bath & Beyond's Cost Plus World Market banner and even, for more than $700 million, its Buy Buy Baby business, though the latter would likely take time because it's more tightly integrated into the company's core business, according to Wedbush.
Bed Bath & Beyond will continue to take advantage of the keepsakes site to some extent, as the companies said that PersonalizationMall.com will continue to provide product and personalization services to the retailer's flagship and its Buy Buy Baby unit.