Bed Bath & Beyond Inc. is selling its PersonalizationMall.com business amid efforts to slim down, renew focus on its core home-furnishings business and reverse years of stagnant sales.
The company agreed to sell the personalized gift company for $252 million to 1-800-Flowers.com, it said Tuesday in a statement. PersonalizationMall.com will continue to provide products and services to Bed Bath & Beyond and its Buybuy Baby unit after the deal closes, which is expected in its fiscal 2020 first quarter.
Bed Bath & Beyond is trying to reverse flagging sales eroded by competition from online retailers, discounters and big box stores, and it hired Mark Tritton from Target Corp. last year to take over as chief executive officer to help turn the company around. But there’s still has a long way to go: The retailer posted declining holiday sales and shrinking gross margin on Feb. 11. That sent its shares tumbling and prompted Loop Capital’s Anthony Chukumba to say it may be “too far gone for a turnaround to ultimately succeed.”
Tritton said Tuesday that the deal with 1-800-Flowers.com would help hasten its transformation. Selling the unit is another important step “towards simplifying our portfolio and deepening our focus on our core Home, Baby and Beauty businesses,” he said.
The shares rose as much as 3% in early trading. The deal price is subject to working capital and other adjustments, according to the statement.
Bed Bath & Beyond said it will continue to “optimize the company’s portfolio of retail concepts and owned real estate.” Tritton already restructured the company’s leadership in December. The company last week reported that comparable store sales, an important gauge of retail success, fell 5.4% in December and January. It attributed this to lower store traffic and “inventory management issues.”