The Container Store and Utah's Beyond Inc. announce partnership

Beyond Inc., the Midvale-based owner of Bed Bath & Beyond, Overstock, Zulily and other online retail brands, has announced a new partnership with The Container Store Group Inc. of Coppell, Texas. Under the terms of the agreement, Beyond Inc. will invest $40 million in The Container Store through a preferred equity transaction, subject to certain terms and conditions.

The Container Store will then provide space within its retail locations for display and sale of Beyond’s Bed Bath & Beyond product assortment for kitchen, bath and bedroom, which will be co-branded. Through this collaboration, the companies expect to drive increased traffic for The Container Store’s core assortment and its high-margin, solution-driven Custom Spaces services business.

Beyond will integrate The Container Store’s Custom Spaces offering, including its Elfa and Preston product lines, into its e-commerce platforms as well as other ventures where Bed Bath & Beyond future licensed stores exist globally.

“This will serve to drive improved revenue, inventory turns, margins and improved customer experience for both companies” Beyond said in a release.

The companies intend for the partnership to position The Container Store to return to profitable store growth over time by utilizing and benefiting from Beyond’s intellectual property, customer data, network of brands and affiliate relationships, the release said.

“We are excited about the opportunities this partnership unfolds for us. We believe its benefits will further our strategic initiatives, including deepening our relationship with customers, expanding our reach, and strengthening our capabilities while accelerating our return to positive same-store sales growth and profitability,” said Satish Malhotra, CEO of The Container Store. “This agreement will enable us to harness Beyond’s data platform and analytics to better identify and target customers at critical points in their purchase journeys and enhance communications with new and existing customers. It will allow us to expand our reach across our combined network and position us to leverage Beyond’s e-commerce expertise to further our own omni-channel tools and capabilities.”

“We see tremendous whitespace for The Container Store’s best-in-class, solution-based offerings across the entire Beyond portfolio, particularly within its high-margin Custom Spaces offering through the proprietary Elfa and Preston lines,” said Marcus Lemonis, executive chairman of Beyond Inc. “We will build a lead management and conversion model coupled with various consumer financial products to gain share and tap into a well-oiled, vertically integrated manufacturing platform that has plenty of untapped capacity. Partnerships like this further support the value of iconic brands leveraging each other’s assets and core competencies while improving customer conversion and retention, enhancing margins, and optimizing marketing expenses which are the principal drivers in delivering value creation and profitable growth.”

The agreement calls for The Container Store to issue approximately 40,000 shares of a newly created series of the company’s preferred stock which Beyond will buy for an aggregate purchase price of $40 million.