What to expect from Bed Bath & Beyond after activist investors embark on a battle

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It's a regular shootout at BBB Corral.

Gunslingers from outside the city, in the form of three activist investors holding a 5% collective interest in Bed Bath & amp; Beyond, arrived in town with a scathing manifesto calling the sheriff and all his deputies (read, the CEO and the entire board of directors) to head towards dusk. Their list of complaints, concerns and almost insults was very long, very specific and very ugly.

To avoid being intimidated, the current management has responded by defending their positions, their actions and their administration, while encircling more and more the carts.

Meanwhile, the title of the company, which was one of the biggest laggards – not to mention the shorts – in the street, made an impressive leap. Surprised by the fact that there could be a duel to the death with the winners and losers that result, investors and speculators clashed up at the NASDAQ bar.

As all city dwellers drew closer to see what was going to happen, a number of potential scenarios arose. They go from the obvious to the sublime.

•& nbsp;First and foremost, the stock is at stake. Whenever agitators focus on a business, it often results in increased attention, not only from them, but also from others seeking to to meddle with the action. Unless this thing dies quickly and does not end, the stock will be everywhere in the foreseeable future.

•& nbsp;The shorters are not happy. The more than 20% increase in Bed Bath sales earlier this week is one of the most frequently shorted headlines in the retail trade. There is no doubt that some actions have involved buying shares to cover these short. At least, this activity should be somewhat reduced in the short term until short-term investors decide that it is safe to return to the water.

•& nbsp;Back in New Jersey, where the company's headquarters are, serious activities are needed to produce good news and do it quickly. The company reports its results for the next quarter in mid-April and, if they look like those of the last quarters, they will not be pretty. In its latest call for badysts, the company said it was ahead of its plan to turn around the situation and that things were not as bad as expected. The tactic has resulted in a nice little short-term rise for the stock, but it's clear that investors want better news, not worse, before accepting this reversal. You can bet that someone is working there even as we speak.

•& nbsp;The three dishonest groups have taken their revenge and hope the big investment companies join them and decide that it is time to get rid of the current management and board of directors. Historically, this rarely happens, at least not on the scale suggested. At the company's annual meeting, usually just before the weekend of July 4th and held as little as possible in the suburbs of New Jersey, it is more likely that proxy fights will be closely contested and that one or three members of the board be dismissed. (That does not mean it will work because the company canceled a director's vote last year and decided to retain it despite shareholder preferences.)

•& nbsp;The current leadership of CEO Steve Temares is expected to remain in Union, the seat of New Jersey, when the smoke clears. Last year, the company made a major change to its number two, the chief merchant. Salespeople doing business with Bed Bath say that they are starting to see a change in attitude – and business style – since the change. This effort will be intensified.

•& nbsp;There will likely be some sacrificial lambs, in the form of some of the smaller nameplates and commercial activities being dropped. Even the current management must admit that there are too many distractions and that all parts are not compatible. Do not be surprised if Cost Plus World Market and Harmon Beauty are eliminated, sold (for peanuts) or otherwise integrated into other existing brands.

•& nbsp;Stores are also present on the block. Over the years, BBB has badembled an badortment of real estate agents, on the badumption that it was a destination and that people would find them. It was true then, but it is no longer the case. With approximately 1,000 Bed Bath locations, this closing process will result in significant acceleration as quickly as leases will permit.

•& nbsp;Finally, the speed will be injected & nbsp; throughout & nbsp; activity, as it has never been in two decades. In its early days, the retailer was as fast as anyone else on the market. Over the next few years, the business has become a daunting task, constantly testing, testing and retesting products, store concepts and merchandising ideas. Think of it this way: BBB and Target both came to the same conclusion at the same time, namely that they were tired and disconnected from their customers. Since then, Target has introduced more than a dozen home brands, revamped countless stores and significantly expanded its urban footprint model. During the same period, BBB introduced a private label (and only last month) while performing new tests on new formats, perhaps representing no more than 10% of its stores. The target is flying high now. Bed Bath walks on the water, at best.

All of these scenarios revolve around gradual and measured changes. And that will probably be the result rather than the mbad slaughter that the groups of investors claim.

Will it be enough? These types of shootings do not usually end peacefully, so you can only be sure of one thing: there will be blood

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It's a regular shootout at BBB Corral.

Outside activists, in the form of three activist investors holding a 5% collective interest in Bed Bath & Beyond, arrived in town with a scathing manifesto calling the sheriff and all his deputies (read, the executive director and the entire board) to leave at sunset. Their list of complaints, concerns and almost insults was very long, very specific and very ugly.

To avoid being intimidated, the current management has responded by defending their positions, their actions and their administration, while encircling more and more the carts.

Meanwhile, the title of the company, which is one of the biggest laggards – not to mention the shorts – in the street, has made an impressive leap. Surprised by the fact that there could be a duel to the death with the winners and losers that result, investors and speculators clashed up at the NASDAQ bar.

As all city dwellers drew closer to see what was going to happen, a number of potential scenarios arose. They go from the obvious to the sublime.

• First and foremost, the stock is at stake. Whenever agitators focus on a business, it often results in increased attention, not only from them, but also from others seeking to to meddle with the action. Unless this thing dies quickly and does not end, the stock will be everywhere in the foreseeable future.

• The shorters are not happy. The more than 20% increase in Bed Bath sales earlier this week is one of the most frequently shorted headlines in the retail trade. There is no doubt that some actions have involved buying shares to cover these short. At least, this activity should be somewhat reduced in the short term until short-term investors decide that it is safe to return to the water.

• Back in New Jersey, where the company's headquarters are, serious activities are needed to produce good news and do it quickly. The company reports its results for the next quarter in mid-April and, if they look like those of the last quarters, they will not be pretty. In its latest call for badysts, the company said it was ahead of its plan to turn around the situation and that things were not as bad as expected. The tactic has resulted in a nice little short-term rise for the stock, but it's clear that investors want better news, not worse, before accepting this reversal. You can bet that someone is working there even as we speak.

• The three dishonest groups have taken their revenge and hope the big investment companies join them and decide that it is time to get rid of the current management and board of directors. Historically, this rarely happens, at least not on the scale suggested. At the company's annual meeting, usually just before the weekend of July 4th and held as little as possible in the suburbs of New Jersey, it is more likely that proxy fights will be closely contested and a board member or three can be excluded. (That does not mean it will work because the company canceled a director's vote last year and decided to retain it despite shareholder preferences.)

• The current leadership of CEO Steve Temares is expected to remain in Union, the seat of New Jersey, when the smoke clears. Last year, the company made a major change to its number two, the chief merchant. Salespeople doing business with Bed Bath say that they are starting to see a change in attitude – and business style – since the change. This effort will be intensified.

• There will likely be some sacrificial lambs, in the form of some of the smaller nameplates and commercial activities being dropped. Even the current management must admit that there are too many distractions and that all parts are not compatible. Do not be surprised if Cost Plus World Market and Harmon Beauty are eliminated, sold (for peanuts) or otherwise integrated into other existing brands.

• Stores are also present on the block. Over the years, BBB has badembled an badortment of real estate agents, on the badumption that it was a destination and that people would find them. It was true then, but it is no longer the case. With approximately 1,000 Bed Bath locations, this closing process will result in significant acceleration as quickly as leases will permit.

• Finally, the speed will be injected throughout the company, as it has never been in two decades. In its early days, the retailer was as fast as anyone else on the market. Over the next few years, the business has become a daunting task, constantly testing, testing and retesting products, store concepts and merchandising ideas. Think of it this way: BBB and Target both came to the same conclusion at the same time, namely that they were tired and disconnected from their customers. Since then, Target has introduced more than a dozen home brands, revamped countless stores and significantly expanded its urban footprint model. During the same period, BBB introduced a private label (and only last month) while performing new tests on new formats, perhaps representing no more than 10% of its stores. The target is flying high now. Bed Bath walks on the water, at best.

All of these scenarios revolve around gradual and measured changes. And that will probably be the result rather than the mbad slaughter that the groups of investors claim.

Will it be enough? These types of shootings do not usually end peacefully, so you can only be sure of one thing: there will be blood