Yahoo Finance Bed Bath & Beyond Concludes Sale of PersonalizationMall.com
Bed Bath & Beyond Inc. BBBY has successfully completed the divestment of PersonalizationMall.com to 1-800-FLOWERS.COM for $245 million. However, certain customary closing conditions are yet to be fulfilled. Even after the sale, PersonalizationMall.com will continue to support Bed Bath & Beyond and buybuy BABY stores. Initially, it had entered into a definitive agreement in February to sell the PersonalizationMall.com business to 1-800-Flowers and was supposed to be closed on Mar 30. However, the deal closure got delayed as 1-800-FLOWERS.COM was short of resources due to COVID-19.
This move is in sync with the company’s restructuring efforts to focus on its core categories, including Home, Baby, Beauty and Wellness. It has also launched Buy-Online-Pickup-In-Store and contactless Curbside Pickup services in a bid to enhance customers’ shopping experience.
The net proceeds from this sale will be utilized to help the company strengthen its financial position in order to stay afloat during this ongoing COVID-19 crisis. The sale is also expected to fund its transformation program.
As part of the transformation plan, the company is making efforts to reorganize and simplify field operations, reduce management positions and outsource several functions. To this end, it earlier revealed plans to eliminate nearly 500 positions to reduce workforce and generate significant cost savings in the long term. These plans are expected to result in nearly $85 million of reduction in annual SG&A expenses. This will, in turn, enhance customer experience, boost sales and drive long-term success. Also, as part of its restructuring initiative, the company is working toward supply-chain transformation to combat declining margins due to the shift to the online platform. It is also focusing on lowering the cost of goods.
However, Bed Bath & Beyond is affected by the COVID-19 outbreak that led to huge sales loss stemming from temporary store closures and lower margins due to the shifting of consumers’ preference to the digital platform. Due to continued COVID-19 impacts, which are yet to be assessed, management refrained from providing any fiscal 2020 guidance.
All said, we expect this transaction to aid the company’s restructuring process, which in turn will drive growth in the near term. We note that this Zacks Rank #3 (Hold) stock has skyrocketed 98% in the past three months, outperforming the industry’s growth of 21%.
Stocks to Consider
Dollar General Corporation DG has a long-term earnings growth rate of 12.5% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Best Buy BBY, also a Zacks Rank #2 stock, has a long-term earnings growth rate of 8.2%.
Office Depot ODP has an expected long-term earnings growth rate of 6.8% and a Zacks Rank #2.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Best Buy Co., Inc. (BBY) : Free Stock Analysis Report
Bed Bath Beyond Inc. (BBBY) : Free Stock Analysis Report
Dollar General Corporation (DG) : Free Stock Analysis Report
Office Depot, Inc. (ODP) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
