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Walmart, Wayfair expected beneficiaries from Bed Bath & Beyond bankruptcy

Oppenheimer told clients it is “hard-pressed to envision a buyer stepping up” in the near term. As such, liquidation “should not come as a surprise to investors.” Given this likely scenario, the remaining market share held by the beleaguered Bed Bath & Beyond (BBBY) -23.06%, which notched about $5.3B in sales in the past year, could soon boost competitors.

“We do expect that certain chains could ultimately capitalize, somewhat upon a market share shift away from BBBY, including: [Williams-Sonoma] (WSM), [Lovesac] (LOVE), and [Wayfair] (NYSE:W), within our Consumer Growth & eCommerce universe. Moreover, the ultimate closure of BBBY stores should further weaken an already upended retail real estate backdrop, implying the potential for even more compelling new unit growth opportunities for still expanding chains such as Five Below (FIVE).”

Bank of America echoed the potential for Wayfair (W) and also called out Overstock (OSTK).

“Over the past five years US home furnishings market share has consolidated to the largest brands including Amazon (AMZN), Target (TGT), (NYSE:WMT) & Wayfair,” the bank’s analysts advised clients. “Wayfair and Overstock could see modest revenue upside from the Bed Bath bankruptcy but we see minimal benefit to Arhaus (ARHS) & RH (RH).”

Piper Sandler homed in on industry giants as the most likely to continue eating up the market share left behind by Bed Bath & Beyond (BBBY).

“We believe that we are entering a new phase of retail industry consolidation and that Target and Walmart will be long-term share beneficiaries,” equity analysts Edward Yruma and Abbie Zvejnieks wrote. “Similar to the Toys “R” Us/KRU bankruptcy in 2017, we think that share gains will largely go to TGT, WMT, and AMZN. Investments in store pickup, store experience, and e-comm are driving share gains at both TGT and WMT, and we expect these to accelerate as we enter a new phase of retail consolidation.”

The two added that Target (TGT) is particularly well-positioned to pick up market share in home furnishings as well as baby products, a bright spot for Bed Bath & Beyond in recent years due to the success of its Buy Buy Baby business.

Swedish home furnishings giant IKEA. The retailer plans to open 17 new locations and invest billions in the US market in the coming years.