By Dietrich Knauth
NEW YORK (Reuters) -Overstock.com intends to sunset its company name and rebrand as Bed Bath & Beyond (OTC:BBBYQ) after purchasing that company's intellectual property assets in bankruptcy, Overstock CEO Jonathan Johnson said on Thursday.
Overstock, which chose not to bid on any of Bed Bath & Beyond's retail locations or inventory, will remain an online-only home goods retailer, combining Overstock's strengths with a better-known and stronger brand name, Johnson said in an interview.
"An opportunity arose in bankruptcy to get the pieces that we loved and not have them burdened by the things we didn't like," Johnson said. "We've long liked the Bed Bath and Beyond name, but we didn't like the stores, the inventory, so don't expect stores from us."
Overstock's "generic" name has held the company back, and it does not really reflect the company's current focus on selling home goods and furniture online, Johnson said.
Before the Bed Bath & Beyond bankruptcy, Overstock thought that a rebrand would take years and potentially hundreds of millions of dollars, according to Johnson. Instead, Overstock company was able to buy Bed Bath & Beyond's name and customer data for $21.5 million at a bankruptcy auction.
The new name will help the company attract loyal Bed Bath & Beyond customers as well as new suppliers who were hesitant to sell their products on a website associated with the "taint" of liquidation, Johnson said.
Overstock already has a new Bed Bath & Beyond website in Canada, and it plans to go live with a U.S. website in August.
The new Bed Bath & Beyond, in addition to being online-only, may be less reliant on coupons than customers are used to, Johnson said.
"Our base pricing is better than what customers have experienced at Bed Bath & Beyond," Johnson said. "While they'll be able to add a coupon on top of it, I don't think they'll need to rely on the standard Bed Bath & Beyond "20% off" coupon that was almost ubiquitous."
Once a storied retailer, Bed Bath & Beyond filed for Chapter 11 bankruptcy protection in April after struggling for years with dwindling sales and a failed merchandising strategy.
A U.S. bankruptcy judge approved Overstock.com (NASDAQ:OSTK)'s purchase of Bed Bath & Beyond's intellectual property on June 27.
Separately, Dream on Me Industries, a New Jersey-based baby products retailer, has tentatively won an auction for the intellectual property of Bed Bath & Beyond's Buy Buy Baby chain, court filings showed on Thursday.
Dream on Me, which sells strollers, cribs and other baby goods through a host of retail partners, won the rights to assets such as Buy Buy Baby’s trademark and domain after an auction on Wednesday, according to the filings. The filings did not disclose the price of the winning bid.