Did Overstock make a (really) big mistake?
Overstock.com (OSTK) is abandoning its long-standing brand name in favor of a store most recently associated with failure: Bed Bath & Beyond (seriously, check out their website).
“We think this is a mistake,” explains Retail analyst Jeremy McLean on The Call @ Hedgeye.
Given this news, OSTK has been removed from Hedgeye Retail’s Long Bias list.
“[Overstock.com] has been operating since the 1990s, making money and growing in ecommerce … this thing hasn’t gone away, it’s actually gotten bigger over the years,” adds McLean. “It’s a little bit concerning that [Overstock.com] is being completely rebranded to a business that has been in decline for roughly 10 years.”
Overstock's rebrand includes Bed Bath & Beyond's intellectual property assets, predominantly their customer list and website domain.
Will this move pay off, or will it drive them into the ground?
“You’ve got declining profits with negative margin consumer slowdown risk,” states McLean. “There’s potential you completely destroy this business with this whole rebrand that we just don’t think makes sense.”
Click above to watch the full clip.
