Bed Bath & Beyond to Acquire The Container Store for $150M

Bed Bath & Beyond has entered into a definitive merger agreement to buy The Container Store in a transaction valued at $150 million. In a regulatory filing, the retailer said its newly created subsidiary, Falcon Merger Sub, will be merged into The Container Store, leaving the latter as a wholly owned unit of Bed Bath & Beyond.

In a letter to shareholders, CEO Marcus Lemonis said The Container Store’s more than 100 locations would be rebranded “The Container Store / Bed Bath and Beyond,” and that the combined business intends to broaden product range and home services as it develops what he described as an “Everything Home” ecosystem.

Total Retail's Take: This decision is more than a transaction for Bed Bath & Beyond; it's a business model shift. BB&B is strengthening its position in the home market, expanding beyond just selling products into services and solutions. Furthermore, the deal signals the next step in BB&B's efforts to diversify its portfolio, which now include retail (Bed Bath & Beyond, Overstock), specialty (The Container Store), and services (Closet Works, Elfa).

The addition of The Container Store gets BB&B more deeply into the physical retail market, picking up 100-plus store locations in this transaction. That will mean greater exposure to consumers and the ability to acquire new customers and better serve existing customers through a growing physical footprint.

Lasty, Lemonis pointed to the cost savings and efficiencies that BB&B will benefit from as its brings another retail brand into the portfolio, citing at least $40 million of annualized cost savings and productivity efficiencies within 12 months to 18 months by fully integrating Kirkland’s, The Container Store, Elfa and Closet Works, and Bed Bath & Beyond into a single business.