Overstock.com Seeks Expansion Into Physical Retail

Many physical retailers are looking to stretch the legs of their e-commerce divisions to maintain sales in the era of COVID-19 and the "retail apocalypse." But internet furniture and home merchandise seller Overstock.com (NASDAQ: OSTK) is taking the opposite approach, and is pursuing growth in "meatspace" after years of a cyberspace-only model.

According to statements by company retail president Dave Nielsen to Adweek, Overstock is so eager to get a brick-and-mortar presence in 2021 it might sell itself to a retailer with a significant lineup of physical store locations. Nielsen said Overstock leadership would prefer being acquired over starting its own stores, though it's also considering a partnership or merger.

A couple looking at a yellow-upholstered sofa in a furniture store.

Image source: Getty Images.

According to its most recent quarterly report for the fiscal second quarter, Overstock's sales weren't significantly dented by the summer reopening of physical furniture stores. Its margins rose from 10.2% to 13.6%, sending its profits higher, too.

Nielsen says Overstock believes a strong presence in both digital and brick-and-mortar retail, rather than specializing in one sales channel, will be the best post-coronavirus strategy. Overstock openly says it wants to be bought by or partner with TJ Maxx, subsidiary of The TJX Companies (NYSE: TJX), a department store offering furniture sales among other categories.

TJX Companies' sales were sent into a tailspin by pandemic closures and lockdowns, but the company has seen a strong rebound since, with comparable-store sales only 3% below 2019's figure during the most recently reported quarter. The company also began paying its dividend again recently with a 13% boost, indicating it may well have the resources to acquire or partner with Overstock if it becomes persuaded such a partnership or buyout is in its best interests.

10 stocks we like better than Overstock.com
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Overstock.com wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of November 20, 2020

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool recommends Overstock.com and The TJX Companies. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.