Bankrupt Retailer BuyBuy Baby Making Brick-and-Mortar Comeback

Bankruptcy and going out of business no longer means what it once did.

When chains like Ames, Caldor, Lechmere, Linens 'N Things, Sports Authority, and Borders Books went bankrupt, that meant the end of those brands. In theory, someone could buy the company's intellectual property (IP) and bring any of those players back, but most appear gone for good.

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A number of other recently-bankrupted retailers did not go away long enough to be missed. Toys R Us, for example, closed all its stores but has come back in a variety of pop-up formats. The chain also has store-within-a-store locations at Macy's (M) - Get Free Report.

Sharper Image, another once-big retail name, also lost its stores, but its name has lived on in products sold at Target (TGT) - Get Free Report and other retailers. There's no real link between the old Sharper Image stores -- which were full of expensive, futuristic gear -- and the low-end products the company's name is being used on now, but the brand still exists.

That's sort of what happened with the recently-closed Bed Bath & Beyond. That chain closed all its stores and liquidated its assets, but its name was bought by the former Overstock.com (OSTK) - Get Free Report. The new owner is not opening new stores, but it has adopted the Bed Bath & Beyond name.

Now, that was what was expected when Dream on Me paid $15.5 million for BuyBuy Baby's brand and digital assets. At the time of that purchase, it was expected the new owner would keep BuyBuy Baby alive as a digital-only (at least for now) brand.

Those plans appear to have changed as Dream on Me has now purchased 11 leases for locations where the baby brand used to operate. That's not a formal promise to reopen the chain, but companies rarely spend $1.17 million for leases they won't use.

Say Hello to the New BuyBuy Baby

Dream On Me bought the BuyBuy Baby's IP when no buyer made an offer to buy its brick-and-mortar business. The company's stores are currently still open as they are being liquidated as part of its bankruptcy filings.

BuyBuy Baby had previously been owned by Bed Bath & Beyond. Dream On Me has been a long-time supplier for the baby chain.

"Dream On Me won 11 out of 20 store leases in the latest auction round. For most leases, court documents show the company is the only bidder. A hearing to OK the sale is set for Friday [July 28] in U.S. Bankruptcy Court for the District of New Jersey with Judge Vincent Papalia," RetailDive reported.  

Liquidation sales are generally run by outside companies and they usually include everything in a store down to its fixtures. It's very likely that if Dream On Me plans to reopen the 11 locations that it won the bids for, the company will have to close the locations to restock them.

The new owner has not commented on its plans for the brand or the new store leases it has won.          

At its peak, BuyBuy Baby has 120 stores.

“The loyalty and trust that customers have in BuyBuy Baby is extraordinary, and we are committed to continue honoring their legacy of offering quality and solution-oriented products at parent-friendly prices,” Dream On Me CEO Mark Serure said in a July 14 announcement about the IP acquisition.