By all accounts, Bed Bath & Beyond's (BB&B) $495 million deal to acquire Cost Plus will create a match made in heaven. The two companies have engaged in a successful test of specialty food departments in BB&B stores.
Barry Feld, CEO of Cost Plus, Inc., which operates 259 stores under the World Market and Cost Plus World Market banners as well as worldmarket.com, said, "Our successful merchandising and product collaborations over the last two years have demonstrated that our organizations work well together and that we can make key contributions to the continued success of the combined company."
Steven Temares, Bed Bath & Beyond's CEO, said, "Through the combination of the highly talented Cost Plus organization with our own dedicated associates, we expect to be able to do even more for, and with, our collective customers."
Gene Castagna, the company's CFO, said the chain was looking to add more Cost Plus sections to BB&B stores. Food, he told The Wall Street Journal, "is a future opportunity."
Bed Bath & Beyond currently operates stores/websites under its own banner as well as BuyBuy Baby, Christmas Tree Shops, Harmon and Harmon Face Values.
Reactions were largely positive to the announced deal.
Laura Champine, an analyst with Canaccord Genuity, according to the AP, wrote, "The transaction will expand Bed Bath & Beyond's consumables assortment into the gourmet food and beverage categories, while BBBY provides greater scale and capital structure to support Cost Plus' 259 stores."
"They're getting maxed out on the number of Bed Bath stores that they can operate in the U.S.," Warren Shoulberg, editorial director of Home Textiles Today, told The Record. "So I'm sure they're looking for another big growth vehicle. And they have a ton of cash; no debt. They certainly have the money to do something like this."