Bed Bath & Beyond will live, online, all thanks to the fame of its household brand. In the same way that Linens ‘n Things, Circuit City, RadioShack or Toys R Us live on in name only.
After many decades of dominance, during which its market valuation went on to reach more than 17 billion dollars, Bed Bath and Beyond filed for bankruptcy and was taken off the Nasdaq on May 2. The market capitalisation of the company had fallen to only 50 million dollars. Very few people would have believed it would be back in the news so quickly and for good reasons.
Yet last week Overstock.com, an e-commerce home goods retailer, agreed to pay $21.5 million for the company’s name, business data and online properties. Even considering the troubles the brand has gone through in recent years, it may not sound like much. Still, Overstock is acquiring none of BB&B’s former shops for that amount. What Overstock most dearly coveted instead was its intellectual property assets, amongst which features BedBathBeyond.com domain name, and even Beyond.com domain name, the acquisition comes of course with all the rights to BB&B’s brand name.
The story does not stop there, Overstock announced on June 29 that it would even change its website’s name to Bed Bath & Beyond. How did it fare as a news to the markets. The company’s stock surged 20% on the announcement, amounting to more than 217 million dollars in additional market capitalisation over a single trading day.
Overstock CEO Jonathan Johnson said the Overstock name reflected the company’s prior liquidation-based model and didn’t align with the type of products it now sells.
We started out 20-plus years ago as a liquidator and became a general merchandiser. Now we’re a home furnishings and furniture company and there [were] a lot of headwinds with the name Overstock, headwinds with customers who were confused who we were and what we were selling, headwinds with suppliers that didn’t want to necessarily sell if it was associated with liquidation.
Jonathan Johnson, CEO of Overstock
In a perfect case of how brands are forever (however poorly managed they could momentarily be), Overstock.com’s deal illustrates that intellectual properties’ acquisitions can more often than not represent one of the best sources of returns when they are placed in the steady hands of ambitious companies.
While the cost of a premium domain name may be intimidating, the potential loss in terms of brand recognition and revenue is much greater. Contact us to learn more about premium domains and how they can help your business thrive.
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