Bed Bath & Beyond Comes to Terms with Activist Firm

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Bed Bath & Beyond has come to terms with activist investor Ryan Cohen and his firm RC Ventures, agreeing to add three board members put forward by Cohen in exchange for a “standstill agreement” that RC Ventures won’t seeking a doubling of its interest in the retailer.

RC Ventures also agreed to not oppose the board’s slate of directors at its upcoming annual meeting. The board will temporarily expand from 11 to 14 members to accommodate the new appointments. The venture group, which holds a 9.8% stake in Bed Bath & Beyond, has agreed to not increase its stake beyond 19.9%.

Two of the directors put forward by RC Ventures, Marjorie Bowen and Ben Rosenzweig, will serve on a four-person strategy committee tasked with exploring “alternatives to unlock greater value” from the company’s buybuy Baby chain, language that generally relates to shopping it around for sale.

“Our company and board have always been committed to evaluating all options to maximize long-term shareholder value, and we look forward to integrating our new directors’ ideas to drive our continued transformation,” said Mark Tritton, Bed Bath & Beyond’s President and CEO, in a release. “Our buybuy Baby business is a tremendous asset, and we are committed to unlocking its full value.”

“By refreshing the board with shareholder-designated individuals who possess capital markets acumen and transaction experience, the company is well positioned to review alternatives for buybuy Baby,” Cohen said in the release. “I appreciate that management and the board were willing to promptly embrace our ideas and look forward to supporting them in the year ahead.”

Tritton came over from Target in 2019, immediately putting his stamp on the company with a management shakeup. A reorganization plan he in initiated included divesting banners Christmas Tree Shops and Linen Holdings, PersonalizationMall, Cost Plus World Markets and One Kings Lane in order to focus on Bed Bath & Beyond’s signature chains.

Last year, Bed Bath & Beyond made several changes aimed at boosting its performance and improving the customer experience. It struck a store-within-a-store deal with Kroger, doubled its same-day delivery footprint with Roadie and upgraded its supply chain through a Ryder partnership.