Continuing a shakeup begun when six executives were let go last month by the new CEO, Bed Bath & Beyond plans to sell half its real estate assets, including its headquarters and an unknown number of its 1,500 stores, to a private equity firm, the Wall Street Journal is reporting.
Oak Street Real Estate Capital LLC will purchase 2.1 million square feet of space from the company, including its Union, N.J., headquarters, a distribution center and some number of stores. It will then lease the locations back from the new owner.
The company is weighing the future of its other real estate assets, according to the WSJ; it also owns the Buy Buy Baby, Harmon, Cost Plus World Market and Christmas Tree Shops chains.
Bed Bath & Beyond will use the proceeds to repay debt, buy back shares and fund new CEO Mark Tritton’s turnaround efforts, the WSJ reported. Tritton came to the company in November from his prior success as chief merchandising officer at Target.
Former CEO Steven Temares was pushed out in May 2019, after an uprising by activist investors unhappy with his leadership and the company’s mounting troubles. Last fall, Bed Bath & Beyond announced plans to close 60 stores, up from the original 40.
The WSJ noted how some retailers have embraced a lease-back approach as their real estate holdings have weighed on operating costs in a challenging environment, while others including Target have opted to keep their own assets.