Bed Bath & Beyond’s Container Store acquisition echoes past retail mergers that failed to deliver

When Bed Bath & Beyond announced last week it was buying the Container Store for a pittance, CEO Marcus Lemonis touted the deal as a key component of his plan to create a home-oriented conglomerate that includes retail brands, home services, installable products such as flooring and cabinetry, insurance, and more.

“We are building the first Everything Home Company,” he said in a release, explaining that it is “designed to make home ownership and living simpler and more affordable through a disciplined, interconnected ecosystem.”

Snagging the Container Store for $150 million, a fraction of its market capitalization high of $1.64 billion more than a decade ago, will allow Bed Bath & Beyond to add the popular modular storage system Elfa and the higher-end customizable Closet Works service to its array of offerings. And—excitingly for those nostalgic for Bed Bath & Beyond’s candle-scented stores, the last of which closed in 2023 following the chain’s bankruptcy filing—the move will be a return to brick-and-mortar retail: The 100 Container Store locations will be rebranded as The Container Store / Bed Bath & Beyond.

Overstock.com purchased the company after its spectacular flame-out three years ago, then changed its name to Beyond Inc, and then last year to Bed Bath & Beyond. Other brands under the BB&B umbrella include BuyBuy Baby and Brand House Collective, a home furnishings company previously called Kirkland’s Home.

Lemonis deserves credit for having a vision for what the company’s components could amount to in the aggregate. But there was some skepticism from Wall Street about the move. Morningstar analyst David Swartz told real estate industry publication CoStar News that Bed Bath & Beyond was “a conglomerate of failing businesses,” and that he wasn’t surprised that investors were balking at Lemonis’ strategy. (Shares are down 15% since January, when Lemonis became CEO after first serving as executive chairman.) GlobalData managing director Neil Saunders has called the company “a bit of a hodgepodge” collection of brands.

And indeed, both Bed Bath & Beyond and the Container Store, which had its own bankruptcy in late 2024, are weak businesses that are a fraction of the size they were at their peaks. When brands are struggling, one plus one is unlikely to equal three.

What’s more, it does not appear to have been smooth sailing behind the scenes at Bed Bath & Beyond. The company has undergone a few rebrands, churn in its C-suite, and quick changes in strategy—offering little evidence of the internal cohesion necessary to make a portfolio of brands gel.

There is no shortage of cautionary tales of retail industry marriages that went awry: Men’s Wearhouse’s acquisition of Joseph Abboud in 2013 yoked together two brands struggling for growth, and it was not transformative for either. Canada’s Hudson’s Bay Company conglomerate, long gone, brought a number of department store chains, all having a hard time—The Bay, Lord & Taylor and Saks Fifth Avenue—in different countries under one portfolio company; most have sought bankruptcy or gone out of business. Even a broadly well-run company like Tapestry can struggle to integrate a weak business: It has taken a few write-downs on its 2017 acquisition of Kate Spade.

However good Lemonis’s vision might look on paper, he’ll have to act fast to show it works: Bed Bath & Beyond had net income losses totaling $650 million, on revenue of $4 billion, in its last three full years.

This story was originally featured on Fortune.com