E-commerce retailer Overstock.com has announced its acquisition of bankrupt retailer Bed Bath & Beyond's intellectual property, signalling a strategic move to boost its sales.

Overstock will no longer operate under its own name online but will instead transition to the Bed Bath & Beyond domain name in the coming weeks.

The company plans to relaunch the Bed Bath & Beyond website in Canada within a week and subsequently introduce a new website, mobile app and loyalty programme in the US.

Rebranding strategy to lift sales

By acquiring Bed Bath & Beyond's intellectual property and digital assets in a $21.5m deal, Overstock aims to capitalise on the well-established brand name and enhance the overall customer experience.

Overstock CEO Jonathan Johnson believes that combining the company's successful asset-light business model with the strong brand awareness and customer loyalty associated with Bed Bath & Beyond will drive accelerated market share growth.

Stock surge despite declining sales

Despite facing a decline in sales, Overstock has experienced a significant surge in its stock value this year, rising by nearly 32%.

Following the announcement of its successful acquisition of Bed Bath & Beyond's assets, Overstock's shares jumped by almost 5% during extended trading on Wednesday. This positive response from investors suggests confidence in the company's strategic moves and its potential for future growth.

Financial performance and estimates

In its first-quarter results released in April, Overstock reported a 29% drop in revenue compared to the previous year, amounting to $381m. The e-commerce retailer also posted a net loss of $10m.

However, these figures exceeded some estimates, as indicated by Street Account, a reputable financial analysis service. Despite the recent decline, Overstock's management remains optimistic about the company's prospects with the integration of Bed Bath & Beyond's assets.

No physical stores included in the deal

It's important to note that Overstock's acquisition excludes any brick-and-mortar Bed Bath & Beyond stores.

Bed Bath & Beyond has been conducting auctions for its various assets, including store leases and assets associated with its subsidiary, Buy Buy Baby.

While multiple bidders have shown interest in Buy Buy Baby's stores, it remains uncertain if any will be purchased and kept operational.