A revamped Bed Bath & Beyond in New York’s Chelsea (credit: Rob Tannenbaum in TimeOut)
Update, March 10, 2022: Ryan Cohen’s RC Ventures LLC has hired a proxy solicitor often used by activist investor Carl Icahn, after announcing his nearly 10% stake in Bed Bath & Beyond on Monday, signaling the possibility of a proxy fight over control of the troubled retailer, Reuters is reporting.
Bed Bath & Beyond is being urged by activist investor and co-founder of Chewy.com Ryan Cohen to revamp its strategy and explore various strategic alternatives, including spinning off the Buybuy Baby chain or selling the entire company, according to the Wall Street Journal.
Cohen, who set off the massive Reddit-fueled “meme stock” investment in GameStop last year after he wrested control of the company, reportedly told the board in a letter that Bed Bath & Beyond needs to “narrow the focus of its turnaround plan and maintain the right inventory mix to meet demand,” the Journal wrote.
Buybuy Baby is considered a stronger operation, according to Cohen, worth several billion dollars all by itself. Bed Bath & Beyond has a total market cap of $1.6 billion. His investment firm, RC Ventures LLC, controls a 9.8% stake in the company.
In May 2019, activist investors pushed out then-CEO Steven Temares after a 16-year tenure as Bed Bath & Beyond struggled against larger competitors offering cheaper private label brands. Tritton stepped in that November, after a six-month interim tenure by former Family Dollar CFO Mary Winston, immediately sweeping out six top executives.
There were high hopes for Tritton as a turnaround agent at Bed Bath & Beyond, given his track record at Target. As chief merchandising officer there, he ran the company’s private-label business, launching numerous brands, some of which ended up doing north of $1 billion in sales.
That has not been the case. For the most recent quarter, Bed Bath & Beyond reported a 28% drop in revenue to $1.88 billion, from $2.62 billion the year before, and lack of inventory due to supply chain issues cost the company $100 million, CNBC reported. Management told analysts some of the decline was due to planned store closures. A total of 170 locations have closed this fiscal year, with a target of shuttering 200 of them.
Last year, Bed Bath & Beyond took some steps to boost its customer experience, including expanding its same-day delivery footprint with Roadie. In November, it announced it would begin offering an assortment of baby and home products through Kroger.com and in its stores in 2022.