Customers carry bags from the Bed Bath & Beyond store on April 10, 2013 in Los Angeles, California.
Kevork Djansezian | Getty Images News | fake images
Bed bath and beyond surged more than 65% in premarket trading on Monday after gamestop Chairman Ryan Cohen disclosed that he had a nearly 10% stake in the retailer, through his investment company RC Ventures.
Cohen, who also co-founded the online pet store Tough, wrote in a letter to Bed Bath’s board that he believes the retailer is struggling to reverse market share losses and get around supply chain problems. He also criticized top executives, including Bed Bath Chief Executive Mark Tritton, for overcompensation during periods of poor performance.
“We believe Bed Bath needs to narrow its focus to strengthening operations and maintaining the right inventory mix to meet demand, while also exploring strategic alternatives including spinning off Buybuy Baby and selling the business outright,” Cohen said. .
In response to the letter, which Bed Bath said it received late Sunday, the big retailer said it had had no previous contact with RC Ventures.
“We will carefully review your letter and look forward to engaging constructively around the ideas you have put forward,” Bed Bath said in a statement. “2021 marked the first year of execution of our bold, multi-year transformation plan, which we believe will create significant long-term shareholder value.”
Cohen’s push for changes at Bed Bath comes after the retailer in 2019 settled a months-long dispute with a trio of activist investors in which four new members added to your board. At that time, the activist group criticized Bed Bath’s e-commerce presence in relation to their peers, including Amazon.
Shortly after that agreement was reached, the retailer hired Tritton, a former Target executive, as CEO. His appointment sparked hope among investors that he was in the works for a change, given Tritton’s deep merchandising experience and success at Target.
Since taking over the company, Tritton has embarked on the closure of hundreds of underperforming Bed Bath locations, sale of non-essential assets including Cost Plus World Market and Christmas Tree Shops, increasing share buybacks, store remodelingdebuting on numerous private labels and most recently cruising Bed Bath through a pandemic.
Cohen, however, said Bed Bath’s “dispersed strategy” isn’t working. He said the company might be better equipped with a private equity owner.
Bed Bath shares have fallen nearly 45% in the last 12 months.
This story is developing. Please check for updates.