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Cohen, who co-founded online pet products retailer Chewy and is
chairman of the board of videogame retailer GameStop Corp,
criticized Bed Bath & Beyond, which is worth roughly $1.6
billion, for an "overly ambitious" strategy, for overpaying its
top executives and failing to reverse market share losses.
"We believe Bed Bath needs to narrow its focus to fortify
operations and maintain the right inventory mix to meet demand,
while simultaneously exploring strategic alternatives that
include separating buybuy Baby, Inc and a full sale of the
Company," Cohen wrote to the company's board of directors.
Cohen said in the letter, reviewed by Reuters, that he owns 9.8%
of the Union, New Jersey-headquartered company through his
investment company RC Ventures LLC. Bed Bath & Beyond's shares
have dropped 43.55% in the last 12 months.
"While we have had no prior contact with RC Ventures, we will
carefully review their letter and hope to engage constructively
around the ideas they have put forth," Bed Bath & Beyond said in
a statement.
Shares of the company soared over 45% to $23.59 in pre-market
trading on Monday.
Cohen did not immediately respond to requests for comment.
The Wall Street Journal first reported the stake.
Cohen is pushing for changes after three activists and the
company reached a settlement in 2019 where four new directors
were added to the board. The group criticized the retailer for
failing to adapt to shoppers' growing preferences to buy online.
Soon after the settlement, the company hired Mark Tritton as
CEO, but Cohen said Tritton has failed to navigate supply chain
volatility and presided over a 14% drop in core sales from a
year ago in the most recent quarter.
Still Tritton was paid approximately $27 million over the past
two fiscal years, Cohen said, noting it was far more than what
CEOs earned at far bigger retailers including Macy's, Kohl's,
and Dollar Tree.
The company's named executive officers were collectively awarded
$36 million in compensation in the last fiscal year.
Cohen said he is focused on the long-term and won't criticize
management for laying the foundation for future value creation,
underscoring his own style at GameStop where he has given few
details about how he plans to resuscitate the company.
At Bed Bath & Beyond, Cohen wants the company to streamline what
he calls a "scattershot strategy" and consider separating the
buybuy Baby chain or selling the whole company, which he says
might better off owned by a private equity company.
(Reporting by Svea Herbst-Baylis with additional reporting by
Akanksha Khushi and Deborah Sophia in Bengaluru; Editing by
Christopher Cushing, Lincoln Feast, Kenneth Maxwell and Shinjini
Ganguli)
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