The Bed Bath & Beyond Real Estate One Year After Bankruptcy: A Lot Of Burlington, A Little Barnes & Noble...and Even Some Pickleball
When it filed for bankruptcy exactly one year ago, Bed Bath & Beyond had been operating 360 of its namesake Big Box stores and 120 buybuyBABY stores.
However, the Company failed to reorganize and all 480 of its stores closed.
But just one year after bankruptcy, the Bed Bath real estate is filling quickly.
Approximately 110 of the 480 Bed Bath store leases were acquired by other retailers in the bankruptcy process.
Dozens of other former Bed Bath sites have also been leased to new tenants - with some already open for business and others expected to launch soon.
So what new tenants have moved into the Bed Bath real estate?
Burlington is by far the largest user - it acquired 64 of the Bed Bath store leases and continues to seek additional former Bed Bath locations.
Baby products manufacturer Dream on Me purchased the buybuyBABY brand and 11 store leases; it has since re-opened new buybuyBABY stores at the sites.
Other acquirers of Bed Bath leases include ALDI, Barnes & Noble, Havertys, Macy’s, Michaels, Ollie’s Bargain Outlet and PGA Tour Superstore
Many other retailers - including Boot Barn, Floor & Decor, Hobby Lobby, TJ Maxx and HomeGoods - have made deals with Landlords for Bed Bath spaces.
And at least half a dozen former Bed Bath & Beyond suites across multiple states are now home to indoor pickleball centers.
Burlington has Backfilled the Most Stores - Just Like in Other Retailer Bankruptcies
Burlington has located in more former Bed Bath spaces than any other tenant - and has made a significant financial investment in its real estate.
It purchased the 64 former Bed Bath leases for ~$12 million and then paid ~$20 million in rent on those leases prior to even opening stores at the leased sites.
Additionally, Burlington funded the buildout and renovation of the former Bed Bath spaces without any contributions from Landlords.
Burlington opened stores in 1/2 of these leased Bed Bath sites in 2023 with the remaining 32 set to open during the first half of 2024.
And even as it races to open new stores in the leased space, Burlington CEO Michael O’Sullivan indicated that the Company is on the hunt for even more Bed Bath sites.
But that is not a surprise.
Roughly 200 Burlington stores —or ~20% of its current store base — were previously occupied by just three now-bankrupt retailers: Kmart, Toys R Us and Sports Authority.
And as O’Sullivan pointed out in an earnings call last year, retail bankruptcies and store closures actually strengthen the Company’s new store pipeline and prospects.
In fact, he noted that many of Burlington’s “most successful and productive stores” were once occupied by bankrupt retailers.
Barnes & Noble’s Real Estate Re-Launch is Leveraging Former Bed Bath Sites
Over the last decade and half, Barnes & Noble was far more likely to close an existing store than to open at a new location.
In fact, during the the fifteen year period between 2008-2023, Barnes & Noble closed over 120 stores.
By the end of last year the Company operated just over 600 bookstores, a significant decline from its peak of 726 stores in 2008.
But Barnes & Noble has returned the store growth as its business improved in recent years.
The Company opened 30 stores in 2023 and is planning to open 50 new stores in 2024.
Including at multiple former Bed Bath & Beyond sites.
A Former buybuyBABY Supplier is Trying To Revive The Brand - And Its Stores
New Jersey-based Dream On Me, a manufacturer of cribs, strollers and other baby products, acquired the buybuyBABY trademark, customer list and other intellectual property for ~$15 MM in June 2023.
One month later the Company paid an additional $1 MM to acquire 11 of the buybuyBABY store leases including 4 locations in New Jersey and 7 other sites along the East Coast.
Dream On Me relaunched the buybuyBABY website at the end of October 2023.
One month later it re-opened “new” buybuyBABY stores at the 11 leased locations that it had acquired during the bankruptcy process.
Indoor Pickleball Operators Have Opened in Multiple Former Bed Bath Spaces
A typical 20-25,000 square foot former Bed Bath & Beyond appears to make for a good conversion into 9 indoor pickleball courts.
At least that is what several different operators have completed at former Bed Bath spaces in Idaho, Utah and Missouri:
S2 Pickleball opened 9 indoor courts (each with reflective paint for glow-in-the-dark pickleball) in a 25,000 square foot former Boise, Idaho Bed Bath store
The Picklr operates a 9 court indoor pickleball center in a 22,000 square foot former Bed Bath space in Logan, Utah; and
Paddle Up Pickleball opened a facility with 9 indoor courts last year in a 25,000 square foot former Bed Bath in St. Louis
And other Bed Bath and Beyond-turned-indoor pickleball centers are even larger.
Center Court Pickleball is converting a 35,000 square foot Bed Bath space in Arizona into a new indoor pickleball center and Ace Pickleball plans to open later this year in a 40,000 square former Bed Bath store in Solon, Ohio.
Even The Bed Bath & Beyond Brand Isn’t Going Away
And as for the Bed Bath & Beyond brand?
Well it also hasn’t gone away.
There’s even a chance that it could re-emerge in physical real estate at some point in the future.
Overstock — since renamed Beyond Inc. — acquired Bed Bath & Beyond’s intellectual property in the bankruptcy process and re-launched the Bed Bath website last year.
On an earnings call earlier this year, Beyond’s CEO Marcus Lemonis even commented that people frequently ask him "is Bed Bath & Beyond going to have stores again?"
Lemonis indicated that there are no current plans to open stores any time soon.
But he made a point to not rule it out in the future.