Bed Bath & Beyond has found a new way to jump-start the brand's relaunch into the brick-and-mortar retail world, striking a deal to acquire The Container Store and its more than 100 locations for a deal valued at $150 million.
The Utah company — whose portfolio includes not only Bed Bath & Beyond but also Overstock.com, Kirkland's and Buy Buy Baby — on Thursday said it was buying Coppell, Texas-based Container Store. Its locations represent over 2.2 million square feet of retail space. The acquisition is expected to close in July.
Marcus Lemonis, executive chairman and CEO of Bed Bath & Beyond, in a letter to shareholders announced the pending deal and said after it closed that The Container Store locations will be rebranded as The Container Store/Bed Bath & Beyond. The goal is to vastly expand Container Store's array of products beyond just storage and organization to the wider selection of home goods that Bed Bath & Beyond is known for, according to Lemonis. And Bed Bath & Beyond will gain a dramatic physical footprint.
"This transaction will fill critical gaps in both our retail and home services strategy," Lemonis said.
There is a "meaningful opportunity to better leverage" the Container Store locations "by expanding assortment, introducing additional brands, and creating a more comprehensive experience for the homeowner," according to Lemonis.
Some retail analysts described the strategy as a smart move, while others questioned if there is a real path forward set for Bed Bath & Beyond. Lemonis has changed the strategy to revive that brand, once a chain with hundreds of stores before filing for Chapter 11 and liquidating in 2023 — beyond just online sales several times now.
Bed Bath & Beyond will also be acquiring Closet Works, based in the Chicago area, and Elfa, a Swedish home-organization system.
Bed Bath & Beyond revival
Under Lemonis' guiding hand, what started out as Overstock.com made a series of acquisitions, including rights to the defunct Bed Bath & Beyond and Buy Buy Baby chains as well as Nashville-area home decor retailer Kirkland's.
Bed Bath & Beyond in October 2024 unveiled plans to reboot Bed Bath & Beyond as a chain, moving the brand beyond online sales, with Kirkland's slated to open small-format Bed Bath & Beyond stores. That plan changed in February 2025, when Kirkland's said it would convert some of its underperforming stores to other banners, including Bed Bath & Beyond. In June last year, Kirkland's said it would accelerate those conversions.
But now it appears that the chain won't undergo any changes.
"Kirkland’s will operate just over 230 locations nationwide and has been a leader in home décor and seasonal merchandise since 1966," Lemonis said in his letter. "We believe this addition strengthens our presence in key categories that drive both traffic and margin, while providing a flexible store base that can be integrated into our broader platform."
Bed Bath & Beyond didn't immediately respond to an email from CoStar News seeking comment Thursday.
Container Store filed for bankruptcy protection in December 2024 after a $40 million deal with Bed Bath & Beyond, then called Beyond Inc., fell apart as the financial circumstances got worse for the organizational retailer. Container Store emerged from Chapter 11 as a private company.
Attractive locations
Several retail analysts said that rebranding and expanding Container Store's merchandise array was a sound strategy. Container Store locations are "next to the top malls and have very good lease terms," according to retail consultant Rudy Milian.
By adding the kind of items that Bed Bath & Beyond sells, Container Store can widen the scope of shoppers it attracts, Milian told CoStar News.
"When you start adding the bedding, the bath, textiles, the kitchen, entertainment essentials, the home services, flooring, lighting, cabinetry — you just add so much when you combine the two concepts," he said.
David Silverman, a senior director at Fitch Ratings, told CoStar News that clearly Lemonis is trying to build a home-goods retail portfolio. And with the demise of the brick-and-mortar Bed Bath & Beyond chain, "there is a space in the market that this company could fill," according to Silverman.
Others were not so optimistic about Lemonis' plans and pointed out how often he has changed them.
"Certainly, investors clearly are not jumping for joy over anything that the company is doing at the moment," David Swartz, a senior equity analyst at Morningstar Research Services, told CoStar News. "The stock has been straight down. It's not surprising because this is just a conglomerate of failing businesses that they're trying to make into something."
'Bit of a hodgepodge'
Bill Read, executive vice president at Retail Specialists, said that Lemonis is good at making investments in "problem children," that is, troubled companies.
"The man loves a bargain, he plays hardball," Read, who has dealt with Lemonis companies as tenants, told CoStar News.
The deal for Container Store makes sense as Bed Bath & Beyond tries "to carve out a more significant stake in the home retail market," Neil Saunders, a retail analyst and managing director at GlobalData, said in a note on Thursday.
"While we think the latest move has merit, we also believe that Bed Bath & Beyond needs to spend some time carefully pulling the strands of the various businesses it has acquired together," Saunders said. "At present, the business is a bit of a hodgepodge and the vision of how it becomes a cohesive company within the home space remains somewhat unclear."
In his letter, Lemonis offered the logic behind his strategy for The Container Store/Bed Bath & Beyond stores.
"We believe we have assembled a lineup of brands that covers the most important categories that help turn a house into a home, with a clear mandate to make that process simple and affordable," he said. "With an average footprint of approximately 21,000 square feet per store, these locations will feature a combination of merchandise across bed, bath, storage and organization, kitchen, and entertaining. More importantly, they will significantly expand their existing home services offering."
The acquisition will deliver at least $40 million in annualized cost savings and productivity efficiencies within 12 to 18 months from fully integrating Kirkland’s Home, Container Store, Elfa and Closet Works, according to Lemonis.