Cleveland-based Ancora Advisors is among a group of investors pressuring Bed, Bath and Beyond, which is owned by Columbus-based L Brands, to make significant changes, including replacing both its CEO and its entire board.
The group, which includes Legion Partners Holdings and Macellum Advisors GP, made its concerns public through a letter to Bed Bath & Beyond’s board. Those concerns, outlined in a press release, include:
- CEO Steven Temares has overseen the destruction of more than $8 billion in market value over his 15-year tenure, with total shareholder returns of negative 58 percent. Since early 2015, the stock has lost over 80 percent of its value.
- Poorly implemented initiatives and inability to adapt the business model to a changing retail landscape has resulted in stagnant sales and declining margins.
- Lack of retail expertise and stale perspectives on the board have hindered proper oversight of the management team.
- Excessive executive compensation and poor alignment of pay with performance.
The group owns approximately 5 percent of Bed Bath’s outstanding common stock.
Among the group’s suggested improvements are hiring a new CEO, fixing the merchandising over-assortment problem, developing a direct sourcing and private label model, cutting costs and a complete and immediate change to the board.
Bed Bath & Beyond responded by saying it had tried engaged the investor group for ideas to improve the company, but it provided none. Instead, the group chose a public attack.
“While the activist group has not provided any specific recommendations despite the company's repeated requests, we note that many of the areas highlighted by the activist group in its press release are already being addressed at a detailed level by the company,” the company said.
