In April, home goods retailer Bed Bath and Beyond filed for bankruptcy. This week, it was announced that Overstock.com has acquired the bankrupt brand’s name, domain, and loyalty program assets for over $21 million. However, Overstock.com’s acquisition did not include the physical Bed Bath & Beyond store leases. Those leases were sold off to other retailers through an auction, and this week the highest bidders were revealed. The majority of the leases, specifically 50 of them, were purchased by Burlington Coat Factory, a discount clothing store, for $13.53. Additionally, nine leases were bought by Michael’s, a craft store, for $2.55 million, and four leases were acquired by Havertys, a furniture brand, for $468,000.
The move will give Burlington already has over 1,100 locations in the U.S. in Canada so it won’t be a huge expansion for them but their ability to outbid other mainstream big box stores underscores the current state of the economy. Discount retail is growing at around 8.5 percent, much faster than the 3.5 percent growth that traditional retail is experiencing right now. This discrepancy might continue if the economy worsens as consumers usually look for more discounted goods when times are tough. When it comes to retail real estate, we will likely see more discount stores become anchors of shopping centers as they replace other struggling retailers.