19 Retail Takeovers: Rumors Run Rampant
J.P. Morgan analyst Christopher Horvers noted that on a recent store visit he saw a Cost Plus World Market store-within-a-store concept inside Bed Bath & Beyond.
This test is currently being performed in only a handful of stores, but could signal Bed Bath & Beyond is considering purchasing Cost Plus."In recent years, Bed Bath & Beyond has increased it exposure to the specialty foods category, and now it appears the company is outsourcing some of its learnings," Horvers wrote in a note. This wouldn't be the first time Bed Bath & Beyond used an acquisition to develop its business. In March 2002 it acquired health and beauty retailer, Harmon, opening a store-within-a-store concept in most of its core locations. Then in June 2003, Bed Bath & Beyond purchased Christmas Tree Shops, which Horvers said was critical in helping the company's direct sourcing capabilities. "The similarities of these acquisitions are that both Harmon's and Christmas Tree Shops were designed to first improve the core and drive the Bed Bath stores' sales productivity," he wrote. Bed Bath & Beyond has more than $1 billion in cash and no debt, making it very capable of purchasing Cost Plus, which has a market cap of $210 million.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV