Best Buy Acquires Yardbird Outdoor Furniture Brand
Best Buy continues its expansion into home categories beyond electronics with the acquisition of St. Louis Park-based Yardbird, a direct-to-consumer outdoor furniture brand started just five years ago by father and son Bob and Jay Dillon.
“We are excited about the opportunity to use our expertise in merchandising and supply chain to scale this business – both online and in physical locations across the nation,” Best Buy CEO Corie Barry said of Yardbird Tuesday during the retailer’s third quarter earnings call. “Because customers are looking to us to complete their solutions, we have been expanding our assortment in categories like outdoor living, as more and more consumers look to makeover or upgrade their outdoor living spaces. This includes products like patio furniture, grills, fire pits, and electric mowers, to name a few.”
Best Buy will pay approximately $85 million for Yardbird, which specializes in premium patio sets made of sustainable materials including recycled plastics. Prices start at around $2,000 for a sectional or table and chair set. The furniture brand, which started out in a small off-the-beaten-path industrial building, now has its main showroom on Highway 7 in St. Louis Park and has opened stores in Denver, Kansas City, Detroit, Washington D. C., and Philadelphia. Demand for Yardbird’s products spiked in the early days of the pandemic lockdown, a trend its founders said has continued.
Jay and Bob Dillon were featured on the 2021 TCB 100 list.
The Yardbird acquisition accelerates a home lifestyle trend that has been building on Best Buy’s website, where products like the Solo Stove outdoor heater and Weber grills were added to the mix earlier this year. The direction seems to be working: Best Buy reported overall sales were up 2% in the third quarter—that’s on top of last year’s 22% increase for the same time-period.
Still, the retailer’s stock took a hit Tuesday, falling 15%, as investors worry about weakening demand and rising costs.
Barry is undeterred. Same day delivery is up 400 percent over last year, and Barry said the retailer hit its fastest small-package online shipping times ever during the 13-week period that ended Oct. 31.
“Our omnichannel capabilities and our ability to inspire and support across all of technology in a way no one else can means we are uniquely positioned to seize the opportunity in this environment and in the future,” Barry said. “More people continue to sustainably work, entertain, cook, and connect at home, and while customers are returning to stores, digital sales were still more than double pre-pandemic levels, and phone, chat and in-home sales continued to grow.”
The strong performance tips to an optimistic holiday outlook for Best Buy. “We are looking forward to a strong holiday season and believe we are extremely well-positioned with both the tech customers want and fast and convenient ways to get it,” said chief financial officer Matt Bilunas. “We are committed to driving initiatives that will deliver future growth and our Q4 outlook reflects continued investments in our new membership program, technology, advertising and our health strategy.”
Yardbird is one of two Best Buy acquisitions that occurred in recent weeks. The second is the $400 million purchase of Current Health, an at-home technology platform that offers remote patient monitoring, telehealth, and patient engagement. “The future of consumer technology is directly connected to the future of healthcare,” said Deborah Di Sanzo, president of Best Buy Health, in a statement announcing the acquisition. “We have the distinct expertise in helping customers make technology work for them directly in their homes and by combining Current Health’s remote care management platform with our existing health products and services, we can create a holistic care ecosystem that shows up for someone across all of their healthcare needs.”