Bed Bath & Beyond is closing more than 40 underperforming stores in early 2026 as part of a definitive merger agreement with The Brand House Collective announced in November 2025. The consolidation marks a significant shift from the companies’ initial partnership strategy toward full operational integration, aimed at achieving $20 million in annual cost savings and improving financial viability in an increasingly competitive retail landscape.
From Partnership to Full Merger
The two retailers’ relationship began in October 2024 when Bed Bath & Beyond entered a strategic partnership with The Brand House Collective, formerly known as Kirkland’s. Under the original agreement, Kirkland’s would operate small-format neighborhood Bed Bath & Beyond stores, each approximately 15,000 square feet, under a license arrangement. However, mounting financial pressures at The Brand House Collective prompted a shift in strategy. By November 2025, the companies announced a definitive merger agreement to consolidate operations under unified leadership, with the transaction expected to close in the first quarter of 2026, pending shareholder approval and lender consent from Bank of America.
Financial Pressures Drive Consolidation
The Brand House Collective faced substantial financial headwinds throughout 2025. CEO Amy Sullivan attributed significant challenges to tornado damage at the company’s distribution center in May 2025 and deliberate inventory liquidation efforts. By mid-year, the company carried $38.9 million in outstanding debt with minimal credit availability. Bed Bath & Beyond provided critical financial support through a $17 million term loan and an $8 million equity subscription under the original partnership agreement. Despite these measures, financial strain persisted, ultimately leading to the merger decision.
The merger agreement values the transaction at approximately $26.8 million in equity value based on closing stock prices from November 21, 2025, with an exchange ratio of 0.1993 shares of Bed Bath & Beyond common stock for each Brand House Collective share.
Operational Restructuring and Cost Reduction
The closure of more than 40 stores represents the largest wave of consolidation for the merged entity as it optimizes its retail footprint. These closures are essential for reducing costs, streamlining inventory management, and supporting bottom-line improvement. The merger will eliminate overlapping corporate positions and duplicate functions across store-level operations, distribution, merchandising, and supply chain management.
Bed Bath & Beyond and The Brand House Collective are targeting $20 million in annual cost savings through the merger. These savings will come from removing duplicated functions, eliminating overlapping systems, and addressing operational inefficiencies. While a specific job count has not been formally disclosed, the scale of store consolidation combined with corporate redundancy elimination is expected to result in significant workforce adjustments.
Strategic Leadership and Brand Portfolio
Amy Sullivan, CEO of The Brand House Collective, will serve as Chief Executive Officer of the newly organized “Beyond Retail Group” division, overseeing all omnichannel retail operations across Bed Bath & Beyond’s brands including Bed Bath & Beyond, buybuy BABY, Overstock, and Kirkland’s Home. Marcus Lemonis will remain as executive chairman, providing strategic oversight. The merger brings together four distinct brands serving different customer segments and retail channels, presenting both integration challenges and opportunities for operational efficiency.
Competitive Context and Market Outlook
The merger occurs amid intense pressure from larger retailers such as Walmart, Costco, and Target, which are expanding aggressively while mid-sized players face consolidation or closure pressures. This consolidation represents a defensive strategy rather than a growth initiative, acknowledging that smaller retailers must achieve scale through integration to remain competitive against retail giants with greater resources and market reach. The combined entity faces a critical period of integration over the next 12 to 18 months, with success dependent on achieving the $20 million cost-savings target while maintaining customer relationships and distinct brand positioning. The transaction’s formal completion in the first quarter of 2026 will mark a pivotal moment in determining whether this retail consolidation achieves its efficiency objectives and financial stability goals.
Sources:
Retail Dive merger announcement and cost reduction report, November 2025 press release
SEC Filings Digest; Bed Bath & Beyond merger agreement and loan terms, November 24, 2025
AP/Reuters coverage of Bed Bath & Beyond–Brand House Collective merger, store closure, and restructuring
Yahoo Finance market and transaction summary; Beyond/Kirkland’s Home integration and job impacts, November 2025