Bed Bath & Beyond is returning to brick & mortar But could the @buybuyBABY new store opportunity be even bigger? Bed Bath plans to repurpose ~250+ Kirkland's Home stores that are ~10K sf Or less than 1/2 the size of the ~25K sf Big Box stores the "old" $BBBY operated Early results from the first conversion in Tennessee last month have been positive as traffic and customer growth has increased And it costs just ~$100K per store to convert a former Kirkland's to Bed Bath The "new" Bed Bath also has brick & mortar plans for buybuyBaby which it acquired in Feb 2025 for $5 MM Just 3 years ago buybuyBaby generated ~$1.5 BB in annual revenue from its ~120 Big Box stores And it was considered the "crown jewel" of the @BedBathBeyond portfolio due to its growth, margin and profitability profile But why else could the return of buybuyBaby to brick and mortar be big? Well baby and children's stores have been one of the hardest hit segments as measured by store closures >3,000 baby stores have closed (and ~20 MM sf of selling space vacated) since 2017 including: ▪️ 2,200+ Gymboree stores ▪️ 230+ Babies R Us Big Box stores ▪️ ~600 Children's Place $PLCE and Carters $CRI stores and ▪️ 120 buybuyBaby Big Box stores So where have all these baby product sales gone? Online sales of baby and children’s apparel increased from $9.6 BB in 2018 to ~$13 BB in 2024 according to IBISWorld But growth in online baby product sales has leveled off in recent years, increasing only 2.3% in 2024 A significant share of baby product sales have stayed offline--at Walmart, Target, dollar stores, club stores And, more recently, off-price retailers Burlington $BURL, Ollie's $OLLI and $TJX have each repurposed dozens of former Toys/Babies R Us stores and now allocate more selling space to baby products and furniture Kohl's has also carved out space in 200+ of its stores to partner with the "new" Babies R Us brand to sell baby gear and furniture This Babies R Us area occupies just ~2,500 sf of a Kohl's store and--but has rolled to less than 20% of the $KSS real estate So brick & mortar baby product market share could be there for the taking if buybuyBaby can deliver a productive store format in the right locations A new small format buybuyBaby store could focus on higher margin items like strollers, car seats, cribs and baby furniture rather than apparel and consumables They could be located alongside major soft goods co-tenants in Power Centers and major retail trade areas And in smaller spaces that are less costly to fixture, furnish and operate In fact the exact characteristics of the majority of the former Kirkland's sites set to be converted to Bed Bath So perhaps $BBBY should split the 250+ Kirkland's stores among both the Bed Bath and buybuyBaby brands? If done right there is the potential to re-create what had previously become a lost cause: A profitable brick & mortar baby store concept