Bed Bath & Beyond shares rise after GameStop chairman announces big stake

Shoppers carry bags from a Bed Bath & Beyond store on April 10, 2013 in Los Angeles, California.

Kevork Jansezian | News Getty Images | Getty Images

Shares of Bed Bath & Beyond rose 65% in premarket trading on Monday after GameStop chairman Ryan Cohen said he owns almost 10% of the retailer through his investment firm RC Ventures.

Cohen, who also co-founded online pet retailer Chewy, wrote in a letter to Bed Bath’s board of directors that he believes the retailer is struggling to reverse its loss of market share and deal with supply chain problems. He also criticized senior executives, including Bed Bath CEO Mark Tritton, for receiving excessive compensation during periods of poor performance.

“We believe that Bed Bath needs to narrow down its operations to strengthen operations and maintain the right inventory mix to meet demand while exploring strategic alternatives, including spinning off Buybuy Baby and selling the company outright,” Cohen said.

In response to an email Bed Bath said she received on Sunday evening, the major retailer said it had not previously contacted RC Ventures.

“We will carefully consider their letter and look forward to a constructive discussion of the ideas they put forward,” Bed Bath said in a statement. “2021 was the first year of our ambitious multi-year transformation plan, which we believe will create significant long-term value for shareholders.”

Cohen’s push for change at Bed Bath came after the retailer settled a months-long row with three activist investors in 2019, bringing four new members to the board. At the time, an activist group criticized Bed Bath’s presence in e-commerce compared to peers including Amazon.

Shortly after this agreement was reached, the retailer brought in Tritton, a former Target executive, as CEO. His appointment raised hopes among investors that the job was headed for a turning point, given Tritton’s long history in merchandising and success at Target.

Since taking over the company, Tritton has gone on to close hundreds of underperforming Bed Baths, sell non-core assets including Cost Plus World Market and Christmas Tree Shops, increase share buybacks, renovate stores, debut numerous private labels, and more. recently survived the pandemic at Bed Bath.

Cohen, however, said that Bed Bath’s “scattered strategy” was not working. He said the company might be better suited with a private equity owner.

Shares in Bed Bath have fallen nearly 45% in the last 12 months.

This story is evolving. Please stay tuned for updates.

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