At BuyBuy Baby, the days beyond time (DBT) payment terms hovered between 17 and 27 days between October 2023 and April 2024, according to credit analytics firm Creditsafe. The DBT jumped to 39 in May 2024, then dipped slightly to 26 in June before jumping back up to 36 in July. DBT dropped to 11 in August, but then spiked up to 52 in September. September’s DBT means that BuyBuy Baby is paying 52 days late, with suppliers waiting an additional 52 days past 60 days for payment if one presumes invoices are due on net 60 terms.
“When you see a company’s DBT spike so quickly and repeatedly, this usually shows something could be amiss and causing cash flow to be strained,” said Ragini Bhalla, Creditsafe’s head of brand and spokesperson. She added that a DBT of 52 days indicates “a severe cash crisis and financial distress.”
Bhalia disclosed that Creditsafe data revealed that BuyBuy Baby hasn’t been managing its payments. “Since December 2023, a large portion of its outstanding bills have fallen into the severely late category, 91-plus days,” or 15.05 percent she said. That spiked to 25.08 percent in March 2024, “while 99.58 percent of its oustanding bills were 60 to 90 days past due in June 2024,” Bhalia said.
BuyBuy Baby was sold to Dream on Me Industries Inc. last year after its original parent Bed Bath & Beyond filed for Chapter 11 bankruptcy court protection in April 2023. Prior to the bankruptcy filing, the BuyBuy Baby banner was considered Bed Bath & Beyond’s crown jewel. Wall Street estimated in the late summer of 2022 that a sale of BuyBuy Baby could fetch the struggling home retailer between $630 million to $910 million. That sale never occurred and Dream on Me Industries acquired the assets for $15.5 million, plus another $1.17 million spent to acquire leases to 11 store locations. The stores are currently in the process of shutting down, with the Baby banner shifting to an online-only operation. And while Dream on Me is the parent company, the two operate as separate entities, and have their own credit reports.
Dream on Me, a crib manufacturer, relaunched the BuyBuy Baby website November 2023, about the same time it reopened the stores. But how strong, credit-wise, has Dream on Me been as it tried to make a go of the BuyBuy Baby store operation?
“When we look at the payment behaviors of Dream on Me, it’s not hard to see why BuyBuy Baby is struggling right now,” Bhalia said.
According to Creditsafe data, DBT has spiked erratically over the past few months at Dream on Me, spiking from 13 in June 2024 to 27 in July before dropping to 14 in August and then rising to 26 in September. In addition, 100 percent of its outstanding bills were 90-plus days past due from February through June 2024.
“This pattern is too important not to pay attention to and indicates that the company may be in a very weak liquidity position and is struggling to pay its suppliers on time,” Bhalia said. She added that more often than not, these DBT patterns often occur in parallel with other issues that include increasing costs, rising debt, decline revenue and significant debt maturing within 6 to 12 months.
One possible reason for the distress at BuyBuy Baby is that consumers have moved on to a different shopping approach.
Natalie Gordon is the CEO and founder of Babylist, which coincidentally also tried to acquire the BuyBuy Baby name. She has shifted her business model due to a change in buying patterns and macro retail trends in the sector.
“The baby industry has experienced significant disruption over the past few years, impacting expecting parents in new ways,” Gordon said. “By listening to our users’ pain points—whether it’s finding better ways to research from home as physical stores close or simplifying the complex process of obtaining a breast pump through insurance—we aim to address their needs.”
Gordon said Babylist has evolved to support parents beyond the registry. “We’re focused on providing holistic support during the fourth trimester and beyond, helping parents as whole individuals, not just meeting their baby’s needs. We believe the industry is shifting in this direction, too,” she said.
Supporting growing families has become Babylist’s north star, Gordon said. “Growing families across the country continue to raise their voices over the lack of support they feel in areas like physical and mental health. We see a clear opportunity to build on the trust we have earned over the past 13 years in these areas,” Babylist’s CEO said.
She didn’t say whether the trends she’s seeing now were in the early stages a year ago when the company bid for the BuyBuy Baby banner and digital assets. Gordon did emphasize that the company listens to its users, which in turn led to the building and expansion of its platform to “connect the dots of the highly fragmented baby market.” She explained that a site user noted challenges experienced in obtaining a breast pump through insurance, which led to the company finding a solution, entering the healthcare space, and improving the support it provides to its customers.
Babylist could be on to something.
Bed Bath & Beyond’s new parent Beyond Inc. is also making big changes. Beyond executive chairman said during the company’s Investor Day presentation last month that it was focused on an asset-light e-commerce operations, while also transitioning to include an affinity and data monetization program.
The core banner includes a soft launch of its new Baby & Beyond brand as part of the Bed Bath & Beyond family of nameplates. Lemonis said Baby & Beyond will launch “in the future.” But more importantly, the move to affinity and data monetization includes businesses where the home retailer can support the customer journey along the path to home ownership. Those businesses include consulting and support services, as well as financial services to meet consumer needs, such as mortgages and HELOCs.
