Two Years After Bankruptcy The Majority of Bed Bath & Beyond Stores Have Been Re-Tenanted or Repurposed
Hundreds of Bed Bath & Beyond stores closed following its April 2023 bankruptcy -- but two years later the majority of this real estate has been re-tenanted or repurposed
On this date two years ago Bed Bath & Beyond filed for bankruptcy.
Within months all 360 of its remaining namesake Big Box stores as well as 120 stores operated by its buybuyBABY subsidiary closed for good.
Those closings were in addition to several hundred additional Bed Bath stores that had closed in the years leading up to its bankruptcy filing.
But just two years after bankruptcy more than 1/2 of Bed Bath sites have been backfilled by other tenants or repurposed for other uses.
Even the Bed Bath & Beyond brand — under new ownership — is returning to physical real estate in 2025.
So which tenants have taken the majority of the Bed Bath real estate?
Some of the Bed Bath sites were scooped up very quickly.
~110 of the 480 Bed Bath and buybuyBaby store leases were acquired by other retailers in a bankruptcy auction:
Burlington BURL 0.00%↑ acquired 64 of the Bed Bath store leases for ~$12 MM; these sites accounted for ~40% of the chain’s net new store openings during 2023 and 2024
Barnes & Noble, Michaels and Havertys Furniture each acquired 3 - 5 of the Bed Bath leases
ALDI, Macy’s M 0.00%↑ , Michaels, Ollie’s Bargain Outlet OLLI 0.00%↑ and PGA Tour Superstore also acquired some of the Bed Bath leases
Other tenants executed new leases with landlords of the former Bed Bath spaces after the bankruptcy filing. These include:
Off-Price Retailers HomeGoods TJX 0.00%↑, HomeSense, Ross Stores ROST 0.00%↑ , and Nordstrom Rack that each leased at least 20 former Bed Bath spaces
Painted Tree Boutiques — which operates in Big Box retail formats and subleases space to hundreds of small shops (like an indoor art fair)— opened in more than a dozen former Bed Bath stores
18 Bed Bath sites are reemerging as new Barnes & Noble bookstores, part of the bookseller's plans to open ~150 new stores in 3 years
But retailers are not the only users moving into former Bed Bath spaces:
Close to a dozen former Bed Bath & Beyond suites across multiple states have been converted into indoor pickleball centers.
Burlington has Backfilled the Most Stores — Like In Other Retailer Bankruptcies
With 100 former Bed Bath sites (and counting), Burlington has located in more former Bed Bath spaces than any other user — and made a significant financial investment in this real estate.
Burlington not only spent $12 MM to acquire 64 former Bed Bath leases in the bankruptcy auction, but it also then paid ~$20 MM in rent prior to even opening stores at these leased sites.
Additionally, Burlington spent millions to fund the buildout and renovation of the former Bed Bath spaces without any contribution from landlords.
Burlington opened stores in 1/2 of the 64 leased sites in 2023 and at the remaining locations in 2024.
In addition to acquiring these Bed Bath leases — Burlington also leased another three dozen former Bed Bath and buybuyBaby sites from landlords over the past couple of years.
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.
Burlington’s CEO, Michael O’Sullivan, has commented that 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, 50 in 2024 and plans to open another 60 new stores in 2025.
Including in at least 18 former Bed Bath & Beyond sites — such as this former Tampa-area Bed Bath-to-Barnes & Noble conversion that opened last week.
Indoor Pickleball Operators Have Opened in Multiple Former Bed Bath Spaces
The earliest Bed Bath-to-indoor pickleball conversions opened in 2023 after a batch of store closings that occurred even prior to the retailer’s April 2023 bankruptcy.
A typical 20,000-25,000 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:
The Picklr operates a 9 court indoor pickleball center in a 22,000 square foot former Bed Bath space in Logan, Utah;
Paddle Up Pickleball opened a facility with 9 indoor courts in Spring 2023 in a 25,000 square foot former St. Louis -area Bed Bath; and
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
But the newest Bed Bath and Beyond-turned-indoor pickleball centers are even larger.
Center Court Pickleball opened last December in a 35,000 square foot Bed Bath space in Arizona.
Last November Ace Pickleball opened a 40,000 square foot pickleball center in former Bed Bath store in Solon, Ohio.
And later this week Pickleball Kingdom is opening in a ~40,000 square foot former Bed Bath & Beyond store in Lynnwood, Washington that features 12 courts, a pro store, locker rooms, event space and even a "dink" wall for practice swings.
Even The Bed Bath & Beyond Brand Is Returning to Physical Real Estate
And as for the Bed Bath & Beyond brand?
Well it also hasn’t gone away.
In fact it is expected to re-emerge in a new real estate format later this year.
Overstock — since renamed Beyond Inc. BYON 0.00%↑ — acquired Bed Bath & Beyond’s intellectual property in bankruptcy and re-launched the Bed Bath website.
But Beyond’s CEO Marcus Lemonis noted that that people had frequently asked him "is Bed Bath & Beyond going to have stores again?"
Last Fall Lemonis announced a partnership with the home chain Kirkland’s KIRK 0.00%↑ to bring back Bed Bath & Beyond in a much smaller real estate footprint.
Kirkland’s will be the exclusive operator and licensee of these “neighborhood” Bed Bath and locations that are expected to be in the range of 7,000 - 15,000 square feet.
At least five of these stores are expected to open later this year.