Partnerships / Acquisitions

Bed Bath & Beyond Takes 1-800-Flowers To Court To Preserve Sale

Bed Bath & Beyond has asked a judge to force 1-800-Flowers to honor their agreement

Even with the coronavirus’ increasing health and financial crises, Bed Bath & Beyond wants to make sure a deal with 1-800-Flowers still goes through as planned — enough to request such from a judge.

The deal agreed upon earlier this year called for 1-800-Flowers, which sells flowers and gift baskets online, to purchase the business, or Personalization Mall, from the home furnishing retail company for $252 million. Personalization Mall specializes in selling keepsakes for special events like weddings.

The deal was slated to close March 30, but due to the virus pandemic, 1-800-Flowers didn’t have the capital to complete the deal as planned. Instead, 1-800-Flowers wanted to delay the deal to integrate the other business to April 30 instead.

That didn’t fly with Bed Bath & Beyond, which said in a complaint in Delaware’s Court of Chancery that “even a calamitous event such as COVID-19 does not permit a party to avoid its obligations.”

The agreement for the sale had a “material adverse effect” (MAE) clause written in, which would have allowed 1-800-Flowers to back out of the agreement if a negative event were to occur involving But there was nothing in the agreement about a large-scale economic crisis, and the court papers state 1-800-Flowers didn’t invoke the MAE anyway.

Bed Bath & Beyond shares were down 6.8 percent, trading at $3.53 on Thursday. 1-800-Flowers’ shares were down 3.5 percent and trading at $12.20. Both trade on the Nasdaq, which had risen 0.6 percent.

Delaware has a history of rigidity on such deals and has usually held buyers to what they committed to do.

This situation is one of the first corporate sales falling through due to the pandemic. Other deals could follow, as the pandemic has thrown into doubt the certainty that all of them will go through as planned. Auto parts retailer BorgWarner Inc was in talks to exit a deal to buy Delphi Technologies for $951 million after Delphi drew down on a credit line without telling BorgWarner.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.