Ryan Cohen, the visionary behind Chewy and the driving force revitalizing GameStop, has a proven track record of breathing new life into struggling companies. Now that GameStop has successfully raised several billion dollars, it needs to start investing wisely. Chances are the company will use the new capital to acquire companies that will increase earnings and expand both e-commerce and brick-and-mortar locations. Cohen’s keen eye for transformative opportunities could potentially turn around several prominent yet faltering brands.
Here are ten companies that could be great acquisition targets for Ryan Cohen and TEDDY:
1. Sears
The Good: For many decades, Sears stood as a beacon of American retail, a testament to innovation and consumer trust. Founded in the late 19th century, the company revolutionized shopping with its groundbreaking mail-order catalog, bringing an unparalleled variety of goods to even the most remote corners of the nation. Customers cherished Sears for its wide selection of quality products, ranging from apparel to home appliances, all offered at competitive prices. The retailer’s commitment to customer service and its robust warranty programs fostered deep loyalty. Sears’ physical stores, strategically located across the country, became destinations for families, offering everything under one roof. This legacy of convenience, reliability, and a customer-centric approach made Sears a beloved household name for generations.
Bankruptcy: Sears, once a retail giant, filed for bankruptcy in 2018 after years of declining sales and mounting debt. The company went bankrupt due to a combination of factors that eroded its business over time. The rise of e-commerce giants like Amazon shifted consumer preferences towards online shopping, a trend Sears failed to adapt to effectively. Leadership decisions, particularly under CEO Eddie Lampert, focused on cost-cutting rather than investing in stores and innovation, leading to deteriorating store conditions and poor customer experiences. Financial troubles, including mounting debt and significant losses, forced Sears to sell valuable assets, providing short-term relief but weakening its long-term viability.
Additionally, intense competition from retailers like Walmart and Target, who offered better shopping experiences and lower prices, further eroded Sears’ market share. The company’s inability to modernize and keep up with changing retail trends left its stores outdated and unattractive. Many Sears stores were also located in declining malls, resulting in reduced foot traffic. All these factors combined led to declining sales, loss of customer loyalty, and ultimately, bankruptcy.
Current Activity: Post-bankruptcy, Sears operates under Transform SR Brands LLC, significantly reducing its retail footprint. The company has shifted focus to a few remaining full-line stores and continues to explore new business models to stay afloat.
Current Stock Situation: Sears Holdings Corp (SHLDQ) is trading at around $0.10 per share. The stock remains highly speculative, reflecting the company’s uncertain future and ongoing struggles to regain market relevance.
2. Toys “R” Us
The Good: Toys “R” Us, founded in 1948 by Charles Lazarus, quickly grew to become a beloved retail giant and a magical wonderland for children and parents alike. Known for its iconic Geoffrey the Giraffe mascot, the store became synonymous with childhood joy and holiday excitement. With its expansive aisles filled with an endless variety of toys, games, and electronics, Toys “R” Us offered a unique and immersive shopping experience that fostered a deep sense of nostalgia and loyalty among generations of customers. The retailer’s famous slogan, “I don’t want to grow up, I’m a Toys ‘R’ Us kid,” captured the essence of its enduring appeal. For decades, Toys “R” Us was the go-to destination for birthday gifts, holiday presents, and family outings, holding a special place in the hearts of millions
Bankruptcy: Toys “R” Us filed for bankruptcy in 2017, burdened by debt from a leveraged buyout in 2005. The company closed all U.S. stores by 2018, marking the end of an era for the iconic toy retailer.
Current Activity: Toys “R” Us ANZ Limited has been expanding its portfolio through strategic acquisitions. Recently, the company acquired Hobby Warehouse and Mittoni, which are well-regarded entities in the hobby and toy industry. Hobby Warehouse is known for its extensive range of hobby products, including model kits, remote-controlled vehicles, and collectibles, while Mittoni specializes in distributing technology and gaming products. These acquisitions are part of Toys “R” Us ANZ’s strategy to diversify its offerings and strengthen its market presence in the toy and hobby sectors across Australia and New Zealand.
Current Stock Situation: The ticker symbol “TOY” on the Australian Securities Exchange (ASX) refers to Toys “R” Us ANZ Limited. This company operates the Toys “R” Us brand in Australia and New Zealand, continuing the legacy of the iconic toy retailer in these markets. Toys “R” Us ANZ focuses on offering a wide range of toys, games, and baby products, maintaining the brand’s strong presence and customer loyalty in the region. Investors interested in this stock should monitor its performance on the ASX and consider the specific market conditions and business strategies relevant to the Australian and New Zealand retail environments.. The ticker TOYRF is the U.S. symbol for the company and trades on the OTC.
3. Blockbuster
The Good: Blockbuster, founded in 1985 by David Cook, quickly grew into the world’s largest video rental chain, revolutionizing the way people rented movies and video games. At its peak in the mid-2000s, Blockbuster operated over 9,000 stores globally, serving millions of customers in 25 countries. The company boasted a vast inventory of titles, appealing to a wide range of tastes and ages, making it a go-to destination for family movie nights and weekend entertainment. Blockbuster’s iconic blue-and-yellow branding and convenient store locations became a staple of suburban life, with the company generating billions in revenue. In 2004, Blockbuster had over 60,000 employees and rented out millions of videos weekly, reflecting its dominance in the home entertainment market before the advent of digital streaming services led to its decline.
Bankruptcy: Blockbuster filed for Chapter 11 bankruptcy in September 2010, struggling with mounting debt and competition from digital streaming services like Netflix. In 2011, Dish Network acquired Blockbuster in a bankruptcy auction for $320 million. Despite efforts to revive the brand, including maintaining some store locations and offering digital streaming services, Blockbuster continued to decline. By 2013, most company-owned stores had closed, and Dish Network wound down the remaining operations. As of now, the only remaining Blockbuster store is a privately-owned franchise located in Bend, Oregon, serving as a nostalgic reminder of the brand’s former glory.
Current Activity: The last Blockbuster store in Oregon remains a standalone operation, serving as a cultural relic. There have been no significant corporate efforts to revive the brand on a large scale.
Current Stock Situation: Blockbuster no longer has a publicly traded stock, having ceased operations almost a decade ago. Its brand, however, still holds nostalgic value that could be leveraged by a savvy investor like Ryan Cohen. The Blockbuster brand is currently owned by Dish Network. Dish Network acquired Blockbuster in a bankruptcy auction. Despite the decline of Blockbuster’s physical stores, Dish Network has retained ownership of the brand and its associated intellectual property. Any acquisition of the brand would need to be a private purchase from Dish, so unfortunately the opportunity to gamble on buying Blockbuster stock in case of an acquisition doesn’t exist.
4. Pier 1 Imports
The Good: Pier 1 Imports, founded in 1962 in San Mateo, California, began as a single store specializing in beanbag chairs, love beads, and incense. It quickly evolved into a leading retailer of unique, eclectic home furnishings and décor. By the 1990s and early 2000s, Pier 1 Imports was at its zenith, boasting over 1,200 stores across North America. The brand became synonymous with its distinctive, globally-inspired merchandise, attracting a loyal customer base seeking exotic and artisanal home goods. At its peak, Pier 1 Imports generated annual revenues exceeding $1.5 billion and was a mainstay in suburban shopping centers, offering everything from furniture and decorative accessories to seasonal and holiday items. The company’s focus on high-quality, stylish products at accessible prices made it a beloved destination for home décor enthusiasts before facing challenges from e-commerce competitors and changing consumer preferences.
Bankruptcy: Pier 1 Imports filed for bankruptcy in 2020, closing all of its physical stores due to declining sales and competition from online retailers. The company struggled to maintain its market share in the home furnishings sector.
Current Activity: Retail Ecommerce Ventures (REV) acquired Pier 1 and relaunched it as an online-only retailer. The brand now focuses on selling home furnishings and décor through its e-commerce platform.
Current Stock Situation: Pier 1’s stock was delisted following its bankruptcy. Pier 1 Imports is currently owned by Retail Ecommerce Ventures (REV), a company founded by entrepreneurs Tai Lopez and Alex Mehr. REV acquired the rights to Pier 1’s brand and intellectual property in July 2020, following Pier 1’s bankruptcy filing and subsequent liquidation of its physical store locations. REV has since relaunched Pier 1 as an online-only retailer, continuing to offer a selection of home furnishings and décor items through its e-commerce platform.
Possible Sell: It has been reported that REV is open to offers on selling Pier 1 as it currently struggles with keeping out of bankrupcy. The timing could be right for Cohen and his team to pick up the brand relatively cheap.
5. Bed Bath & Beyond
History and Success: Bed Bath & Beyond, founded in 1971 by Warren Eisenberg and Leonard Feinstein, started as a small store in Springfield, New Jersey, specializing in discounted home furnishings and bedding. The company grew rapidly, becoming a household name with its expansive selection of home goods, from kitchenware and bedding to furniture and decor. By the early 2000s, Bed Bath & Beyond operated over 1,500 stores across the United States, Canada, and Mexico, known for its vast product variety and extensive use of discount coupons. The retailer’s superstore format and commitment to customer service made it a favorite destination for shoppers furnishing their homes.
At its peak, Bed Bath & Beyond was a formidable player in the home goods retail market. The company generated annual revenues exceeding $12 billion and employed over 65,000 people. Its extensive footprint included more than 1,500 stores, becoming a staple in shopping centers across North America. The brand’s popularity was bolstered by its extensive mail-in coupon campaigns and a reputation for quality products and customer service. Bed Bath & Beyond’s dominance in the home goods sector was further cemented by strategic acquisitions, including buybuy BABY and Cost Plus World Market.
Bankruptcy: Despite its success, Bed Bath & Beyond faced significant challenges in the late 2010s. The rise of e-commerce giants like Amazon and changing consumer shopping habits led to declining sales and profitability. The company’s struggles were exacerbated by strategic missteps, including delays in developing a strong online presence and ineffective management decisions. In April 2023, after years of financial turmoil and attempts to restructure, Bed Bath & Beyond filed for Chapter 11 bankruptcy protection. The company’s bankruptcy marked the end of an era for one of America’s most recognizable home goods retailers. The brand and IP for Bed Bath and Beyond was purchased by Overstock.com in an auction. The IP and brand of Buy Buy BABY, a subsidiary of BBBY, was purchased by Dream On Me.
Fraud: As Bed Bath & Beyond navigates its bankruptcy proceedings, the company has faced additional turmoil with the cellarboxing of its stock, a term referring to a stock trading at extremely low prices, often pennies per share, and manipulated by hedge funds, forcing the stock to undergo bankrupcy. This decline has significantly impacted shareholder value and market confidence. Compounding these challenges are recent fraud claims against former CEO Mark Tritton and the current board. Allegations have surfaced accusing them of misleading investors about the company’s financial health and strategic direction, exacerbating the retailer’s downfall. These claims have intensified scrutiny and legal pressures as Bed Bath & Beyond seeks to restructure and stabilize amidst its ongoing financial and operational crises.
Current Stock Situation: Bed Bath & Beyond’s stock was removed from brokerage accounts on May 3, 2023. 📉 This delisting came as a result of the company’s continued financial struggles and its filing for Chapter 11 bankruptcy protection, leading to the cessation of public trading and significant impacts on investors holding the stock. Bullish investors believe that court dockets reveal Cohen is making a play for BBBY, with value found in the net operating losses (NOLs), brand equity, recouped fraud payments, and excessive short interest that would be forced to close upon the return of the BBBY ticker.
Conclusion
In examining the trajectories of Bed, Bath, & Beyond, Sears, Blockbuster, Toys “R” Us, and Pier 1 Imports, a common theme of transformation and adaptation emerges. Each of these once-iconic retail giants dominated their respective markets, bringing unique products and experiences to millions of customers. However, shifts in consumer behavior, the rise of e-commerce, and strategic missteps led to their declines. Despite facing bankruptcy, some of these brands have found new life through acquisitions and digital reinventions, illustrating the enduring value of their legacies. The stories of these companies underscore the importance of innovation and agility in the ever-evolving retail landscape.
