1-800-Flowers is acquiring PersonalizationMall.com from troubled retailer Bed Bath & Beyond, which has been in the midst of a major turnaround effort, for $252 million in a deal expected to close in the seller’s first fiscal quarter.
Chris McCann, CEO of 1-800-Flowers, said PersonalizationMall.com has been growing, posting revenues north of $150 million in 2019. “We expect PersonalizationMall.com to be accretive to our top- and bottom-line results in fiscal 2021,” McCann said in a release.
The acquisition will include a newly renovated 360,000-square-foot production and distribution center, a large database of B2B and B2C customers and businesses and “a purpose-built, website and mobile platform with significant and growing customer traffic,” 1-800-Flowers said.
“PersonalizationMall’s extensive product offering and industry-leading personalization capabilities will be an excellent addition to our growing family of popular gifting brands,” McCann said. “The broad assortment of customizable products and processes that have made PersonalizationMall.com a premier provider of keepsake items will help us further our company’s vision to inspire more human expression, connection and celebration while enhancing our position as the leading one-stop destination for all our customers’ celebratory and gifting occasions.”
PersonalizationMall.com will still provide product and personalization services to Bed Bath & Beyond and sister brand buybuy BABY after the transaction closes. Bed Bath & Beyond’s new president and CEO, Target veteran Mark Tritton, has been busy shaking up his leadership team four months into the job as the company works to improve its performace.
Last week, Bed Bath & Beyond released preliminary results for the first two months of its fourth quarter (December and January), including a 5.4% decline in comparable sales due to store traffic declines as well as inventory management issues and an increase in promotions and markdowns.
Just last month, Bed Bath & Beyond announced it was selling half its real estate assets, including its headquarters and an unknown number of stores, to Oak Street Real Estate Capital LLC. The month before that, Tritton swept out six executives, including its CMO and its general counsel.
“This transaction (selling PersonalizationMall.com) is another important step towards simplifying our portfolio and deepening our focus on our core home, baby and beauty businesses,” Tritton said in a separate release. “By unlocking valuable capital from within our business, we can accelerate the Company’s ongoing business transformation and our efforts to reestablish Bed Bath & Beyond’s authority in the home space.”
MCM Musings: This deal gives Bed Bath & Beyond a much-needed capital infusion, while 1-800-Flowers.com gets a wealth of assets and new product offerings in its gifting category. It will be interesting to see what other major shakeups are coming as Tritton puts his turnaround plan and trim down in full gear. It’s certainly a much heavier slog than his time as a rock star at Target.