Bed Bath & Beyond (BBBY) Piper Sandler Growth Frontiers Conference summary

Strategic vision and business model

• Focus on building a holding company structure that leverages data and IP monetization, with brands operating as renters of IP to maximize contribution margin and EBITDA individually.

• Emphasis on accumulating detailed consumer data to enable affinity products and services such as home warranties, shipping insurance, mortgages, HELOCs, credit cards, and a global loyalty program.

• Asset-light approach by leveraging partnerships and licensing, avoiding direct store ownership, lease, or inventory risk.

• Recent sale of company building to remove $34 million in mortgage debt and add $18 million in cash.

• Announced first licensing deal with PEM America, expected to be a multimillion-dollar transaction, with more deals in progress.

Brand management and operational changes

• Overstock, Bed Bath & Beyond, and Zulily are managed as distinct brands, each with a clear market focus: Bed Bath on home goods, Overstock on off-price and liquidation, and Zulily on apparel.

• Overstock was relaunched as a subdomain after a failed rebranding to Bed Bath & Beyond, with current run rate at $170 million since April.

• Zulily soft-launched, focusing on women's and kids' apparel and beauty, with strong vendor relationships reestablished.

• Sourcing for Overstock leverages relationships from Bed Bath and direct factory channels, including closeout inventory from Channel Control Merchants and Hilco.

• Sequential improvement in margins and reduction in SG&A, with a focus on profitability over pure revenue growth.

Licensing and partnership transactions

• Announced a $15 million senior secured loan to Channel Control Merchants, converting stores to Overstock with no lease, labor, or inventory liability, and generating $4 million annually in interest and fees.

• Bed Bath & Beyond brand to be licensed to a retailer operating hundreds of locations, with expected store presence by February or March 2025; company will be a senior secured lender and material shareholder.

• Inventory from these partners will be integrated into Bed Bath and Overstock platforms, optimizing inventory turns and data collection.

• Additional similar transactions planned, including two formats for Bed Bath & Beyond: small and large format stores.

• Company will manage and grow partners' e-commerce businesses, incentivized by financial performance and data sharing.