Beyond to Make Physical Retail Comeback With $40M Investment in The Container Store -- Update

By Sabela Ojea

Beyond is investing $40 million in The Container Store, providing the struggling retail chain a financial lifeline while returning some Bed Bath & Beyond products back to physical retail locations.

Shares of The Container Store surged 35% to $14.44 in after-hours trading. Through Tuesday's close the stock has climbed 23% in the past three months, but has plunged 69% this year.

The specialty retail chain offering storage and organization products on Tuesday said it's partnering with Beyond to help it return to profitable comparable store growth after reporting declines in that key metric, together with losses over the past few quarters.

The Container Store will issue about 40,000 shares of the company's newly created series of preferred stock to Beyond for an aggregate purchase price of $40 million, the company said.

The investment from Beyond, the owner of Bed Bath & Beyond, comes about five months after The Container Store said it was launching a strategic review of the business. In August, the company said it would stop providing financial guidance as it evaluated strategic alternatives for the company in the midst of a challenging environment for the general merchandise category.

The partnership also comes at a time when Beyond, whose portfolio also includes Overstock and Zulily, has shown progress in narrowing its quarterly losses after emerging from bankruptcy last year. A few months before that, Bed Bath & Beyond Inc. filed for bankruptcy protection to wind down its business after years of losses and failed turnaround plans left the once-powerful retailer short of cash.

As part of the agreement, Beyond will get space at some of The Container Store's locations to showcase co-branded assortment for kitchen, bath and bedroom.

The Container Store said its custom spaces offering will be featured across Beyond's online business, adding that it intends to benefit from its new investor's intellectual property, customer data, network of brands, and affiliate relationships.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

(END) Dow Jones Newswires

October 15, 2024 19:08 ET (23:08 GMT)

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