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.
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Shares of Bed, Bath & Beyond  (BBBY) - Get 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.

"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.