A trio of activist investors think that the business model of Bed Bath & Beyond Inc. has become sleepy and plans to wake up the big-box retailer.
Three activist funds – Legion Partners Asset Management LLC, Macellum Advisors GP LLC and Ancora Advisors LLC – jointly control a stake of about 5% in Bed Bath & Beyond and are preparing to launch a proxy fight to replace the entire board of directors, consisting of 12 people. according to people familiar with the subject.
The group says Bed Bath & Beyond has not managed to adapt, as consumers are increasingly shopping online or waiting for unique experiences in physical stores, said people. The retailer has let its costs go up, they said, resulting in reduced margins in recent years.
The group of investors wants the retailer, known for its department stores full of sheets, towels, trinkets and other household items, to better manage its goods and consider selling non-essential brands such as Buy Buy Baby and Cost Plus World Market. business, people said.
He also wants to replace the CEO, Steven Temares, who has been running the company since 2003, he said, to better align pay with performance.
Among the 16 director nominees for the group are Jeffrey A. Kirwan, former CEO of Gap Inc., Alexander W. Smith, former CEO of Pier 1 Imports Inc., and Jonathan Duskin, founder of Macellum, said these people.
Bed Bath & Beyond of Union, based in New Jersey, did not immediately respond to a request for comment.
Bed Bath & Beyond shares have declined 35% over the past year, compared to an increase of 8.1% in the S & P 500 and same store sales have fallen in each of the last seven quarters , according to FactSet.
The company recently stated that it favors profitability over sales growth and that some of its actions, such as removing less profitable items and changing its free delivery policy, could hurt short-term sales but should improve term profitability. The company is updating its online shopping platform and testing in-store changes in dozens of Bed Bath & Beyond stores, including adding seasonal items, reducing inventories and updating displays.
Mr. Temares said in the company's last earnings call in January that the results of some of these stores were promising, and his shares rose more than 16% the next day, after he said he was ahead of schedule. in terms of reducing operating profit. . The company is expected to release its fourth quarter financial results on April 10.
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Bed Bath & Beyond was founded by Leonard Feinstein and Warren Eisenberg in 1971. The two men are long-time board members and co-chairs and control about 2.7% of the company's stock, according to FactSet.
Legion, Macellum and Ancora all tend to stir in small businesses. The California-based legion was sown by the California State Teachers' Retirement System and had previously urged Perry Ellis International Inc. to sell itself. Macellum, based in New York, concentrates its activities on retail investment and has previously reached an agreement with Children's Place Inc., while Ancora, Ohio, has obtained a seat on the board of the Potbelly Corp. sandwich chain.