Shares of Bed Bath & Beyond (NASDAQ:BBBY), an omnichannel retailer of home furnishings products, traded over 7% higher Tuesday after the company announced an agreement to sell PersonalizationMall.com.
Bed Bath & Beyond entered into a definitive agreement to sell PersonalizationMall.com to 1-800-Flowers.com (NASDAQ: FLWS) for $252 million. Bed Bath & Beyond acquired PersonalizationMall.com in 2016 for $191 million in cash, in hopes it would help boost its e-commerce business.
Said Mark Tritton, Bed Bath & Beyond's president and CEO, in a press release: "This transaction is another important step toward simplifying our portfolio and deepening our focus on our core Home, Baby and Beauty businesses. 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."
This is a positive development for investors who are still processing the company's fourth-quarter results, which disappointed and made it clear a turnaround wouldn't be completed overnight. In its fourth quarter, management noted declining traffic, higher than anticipated promotional activity, and poor inventory management as headwinds to its financial results. Fourth-quarter comparable-store sales fell 5.4%, compared to analyst expectations of a 1.5% decline.
It's very possible this isn't management's last transaction; it could generate more cash to help fund its roughly $1 billion commitment to reduce its long-term debt, repurchase shares, and invest in its core businesses to drive the company's turnaround in a competitive retail area.