Home goods retailer Bed Bath & Beyond has acquired 18-year-old e-commerce site PersonalizationMall for $190 million in cash, the companies announced last week.
The retailer expects the acquisition to boost its assortment in product personalization, as well as its fiscal 2016 earnings. Bed Bath & Beyond CEO Steven H. Temares said in a statement that the growing segment of personalized goods presents the retail company with a “significant opportunity.”
Bed Bath & Beyond’s financial advisor in the deal was Goldman, Sachs & Co., and PersonalizationMall’s advisor was William Blair.
With sales slipping and e-commerce posing a growing challenge, Bed Bath & Beyond needs to make some assertive moves to recapture market share. One of its major problems is that its merchandise, which includes a lot of home goods basics, are commodities that shoppers mostly choose on price and can easily be found on Amazon.
PersonalizationMall, which uses a variety of personalization processes including sublimation, embroidery, digital printing, engraving and sandblasting, could breathe new life into Bed Bath & Beyond's assortment basics and offer shoppers unique gift options. The retailer has struggled in several recent quarters as its ubiquitous and popular coupons have eaten at its margins.
Same-store sales overall fell 1.2% in the second quarter compared to last year’s 0.7% rise, though online sales grew more than 20%. Bed Bath & Beyond's reduced free shipping threshold of $29 and increased rate of redemption of its famous blue coupons both impacted margins during the quarter.
In recent months, the retailer has experimented with alternate revenue streams by purchasing online furniture site One King’s Lane and piloting an annual membership model. While analysts have seen promise in the pilot, Profitero VP of strategy and insights Keith Anderson told Retail Dive earlier this year that he believes memberships are “successful, but saturated,” adding that was likely the reason e-commerce retailer Jet abandoned the approach shortly after its launch last year.