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Bed, Bath & Beyond Rises on Cost Plus Sale, Buyback Plans

Bed, Bath & Beyond stock traded higher Monday after the home retailer finalized a plan to sell its remaining non-core business under Cost Plus World Market.

Shares of Bed, Bath & Beyond  (BBBY) - Get Bed Bath & Beyond Inc. Report jumped Monday after the home retailer said it had sold its remaining non-core business of specialty foods and home furnishings part of Cost Plus World Market to private equity firm Kingswood Capital Management. 

The stock of the Union, N.J., company rose 1.56% to $19.60 at last check.

The home furnishing chain also approved a $150 million share buyback and added that this would raise its overall share repurchase plans by 22.2% to $825 million over the next three years.  

The company is funding these with existing cash from the "recent monetization of its non-core assets."

In October, the retailer said it will purchase $225 million in shares this year, as well as $150 million per year over the next three years as part of an accelerated shareholder return program.

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"We've taken deliberate steps throughout the year to streamline our portfolio and fortify our strategic focus in Home, Baby and Beauty & Wellness, and today's announcement represents the conclusion of this work," said President & Chief Executive Mark Tritton in a statement.

"In all, we have unlocked significant value from the divestiture of 5 business concepts this year, and we have also meaningfully reduced our lease liability and overall debt," he added. 

Cost Plus World Market will continue to operate as a separate retail brand under L.A., company Kingswood Capital Management. The terms of the deal include 243 brick-and-mortar locations, the CPWM digital business, 2 distribution facilities and a corporate office in Alameda, Calif.

The transaction is expected to close at the end of February next year, the two companies said.

Advisors to Bed, Bath & Beyond on this transaction included B. Riley Securities and Bryan Cave.

In October, Bed, Bath & Beyond had announced an aggressive turnaround plan that includes store closures and supply chain investments.