Shares of Bed Bath & Beyond (BBBY) – Get Report rose Wednesday after the home goods retailer announced agreements to sell its Christmas Tree Shops, its Linen Holdings business, and a distribution center for $250 million.
The distribution center is in Florence, N.J.
Bed Bath was suffering prior to the coronavirus pandemic, as online retailers were eating into its sales. But now its own digital sales have boosted it during the pandemic.
The company’s shares were at $23.49, up 6.07%, in premarket trading, and have gained 28% year to date.
“Today’s announcement builds on the purposeful steps we have made throughout the year to simplify our portfolio, unlock capital and create clear strategic focus to accelerate our plans to build our authority in the home, baby, beauty and wellness markets,” CEO Mark Tritton said in a statement.
“Customers are responding well to the introduction of our new omni-always services, and we will continue to invest in our digital-first experience with a customer-inspired assortment that makes it easy to feel at home with Bed Bath & Beyond,” he added.
Bed Bath is selling Christmas Tree Shops, which has 80 locations, to Handil Holdings. Bed Bath is selling Linen Holdings to The Linen Group, an affiliate of Lion Equity Partners. Linen Holdings is selling its New Jersey distribution to an institutional buyer.
Morningstar analyst Jaime Katz wasn’t too impressed.
“We don’t view these transactions as a surprise, given that management has been evaluating the relevance of all business lines for some time, and we identified Christmas Tree Shops as a likely candidate for sale,” she wrote Tuesday.
“We don’t plan to alter our $15 fair value estimate.”