An auction for all of Buy Buy Baby’s assets was originally scheduled for 10 am ET on Wednesday. Bids will now only be accepted for the chain’s intellectual property, including its trademark and domain, according to people familiar with the matter.
The failed home goods retailer plans to host a separate auction, possibly on Thursday, where buyers can bid to keep Buy Buy Baby and its stores running, said the people, who were not authorized to speak publicly on the matter. .
An initial winner is likely to be chosen during the intellectual property auction on Wednesday. That bidder and other suitors can participate in the second auction. If Bed Bath & Beyond receives a higher bid for the entire banner than for the intellectual property, that bidder could be selected and replace the winner of Wednesday’s auction, the people said.
The decision to split the bidding comes after the retailer carried out separate sales procedures for their Buy Buy Baby and Bed Bath & Beyond banners.
The move, seen as unusual in the bankruptcy world, allows Bed Bath & Beyond to increase offers for its Buy Buy Baby chain as doubts grow about what, if any, offers will come, some people said.
The brand, which sells baby items like strollers, clothing and cribs, has long been considered the crown jewel of Bed Bath & Beyond’s assets. He attracted the interest of numerous bidders both before and after its parent company filed for bankruptcy. Some potential buyers considered keeping the stores open.
But as the auction neared, interest in keeping those stores alive waned and the retailer has struggled to close bids in an increasingly uncertain sales process, some people said.
Bidders interested in buying Buy Buy Baby and operating their physical stores and online presence would have to buy most of their more than 100 locations to achieve profitability.
Expenses associated with running stores, such as leases, overhead, and salaries, make it difficult to achieve profitability if a buyer purchases only a fraction of the Buy Buy Baby doors along with their intellectual property.
“There is no profitable model where you only have 10 stores or 40 stores,” a person with knowledge of the matter previously told CNBC.
Bed Bath & Beyond did not respond to CNBC’s request for comment.
A credit offering from pre-bankruptcy lender Sixth Street Partners, which may partner with an e-commerce platform, is seen as a prime contender, some people said. It is not clear if the offer will go beyond the intellectual property assets. Sixth Street Partners did not respond to CNBC’s request for comment.
Go Global Retail, which owns children’s clothing brand Janie and Jack, was initially interested in keeping Buy Buy Baby stores open, but the number of locations it was interested in saving has since dwindled to about 20 stores, if there are any, CNBC previously reported.
Direct-to-consumer online registry Babylist submitted an offer to acquire some of Buy Buy Baby’s assets, such as its domain name and trademark, but opted out of the offer for its stores, the company previously told CNBC. Executive Director Natalie Gordon.
Earlier this month, Overstock.com won the auction for the assets of Bed Bath & Beyond and purchased the brand’s intellectual property and digital assets for $21.5 million. The digital retailer did not agree to buy any of the Bed Bath & Beyond stores.