A “Store is closed” sign is seen at a Buy Buy Baby store in Brooklyn, New York, Monday, Feb. 6, 2023.

Stephanie Keith | Bloomberg | Getty Images

Bed bath and others CNBC has learned that Friday’s auction of its Buy Buy Baby chain was canceled after failing to find a buyer willing to keep its stores open, but the baby retailer’s auctions aren’t quite over yet.

Bidders withdrew from the auction after determining the chain was no longer worth buying because its value had plummeted, but there was still interest in the asset, according to two people familiar with the matter who were not authorized to discuss the matter. public.

While this is unusual, Bed Bath & Beyond could still accept Buy Buy Baby bids early next week. The chain’s fate won’t be finalized until Tuesday, when a court hearing will approve the sale of Buy Buy Baby’s intellectual property to Dream on Me Industries. The company, a little-known New Jersey retailer and one of Buy Buy Baby’s former suppliers, agreed to buy its logo and digital assets for $15.5 million if no higher bids emerged.

Once considered the crown jewel of the Bed Bath & Beyond empire, the baby chain has flopped. The baby chain has been conducting liquidation sales across its 120 locations since its parent company filed for bankruptcy protection on April 23.

As the auction process dragged on and Buy Buy Baby’s inventory dwindled, so did its value. Nearly three months after the sale closed, there was little left to bid on other than the brand’s intellectual property, a person familiar with the matter said.

“Most of the value is in the intellectual property, especially at this stage of the process. Conceivably, three months ago, when their stores were up and running and fully functional, that might not have been the case,” the person said.

Over the past few weeks, Bed Bath & Beyond has repeatedly delayed and split up the Buy Buy Baby auction process in receivership in order to get higher bids and find a company willing to keep the stores open.

Last week, the company arranged an auction dedicated to the “Buy Buy Baby” intellectual property and announced “Dream on Me” as the winner.

Bed Bath & Beyond plans to hold a separate auction on Friday where buyers can bid on the chain as a going concern, noting that Dream on Me bids could be displaced if they receive a higher selling price.

However, the company canceled the auction on Thursday night after those bids failed to materialize, a spokesman said in a statement.

Brand investment firm Go Global Retail, represented by Ankura Capital Advisors, has been interested in keeping about 75 percent of Buy Buy Baby’s stores open, and had earlier sought an additional $50 million in funding to back its bid, CNBC previously reported. The company has branched out into the baby business and currently owns children’s clothing company Janie and Jack. The company declined to comment when contacted by CNBC.

If an auction were held, bids would likely not be much higher than the $15.5 million Dream on Me proposed for the chain’s intellectual property, since the only remaining assets are its employees, vacant stores, leases and remaining inventory, the company said. . source.

Any company willing to take over will likely have to close stores for several months so they can restock and resume operations.

Last month, Overstock.com won an auction for Bed Bath & Beyond’s intellectual property and digital assets with a $21.5 million bid. It decided to change the name of the website of the same name to Bedbathandbeyond.com.

It’s unclear what Dream on Me plans to do with Buy Buy Baby if it wins. The company did not respond to CNBC’s request for more information.

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