Bed Bath & Beyond saw it stock rally in pre-market trading early Monday (March 7), jumping 75% following the news that activist investor Ryan Cohen was pushing the company to consider a sale.
According to media reports, he’s now imploring the home goods company to narrow the scope of its turnaround plan, make sure its inventory mix is consistent with demand and to look at a sale of its Buybuy Baby offshoot, if not the entire company.
In a letter to the company, Cohen said Buybuy Baby could be worth several billion dollars, given its growth trajectory. He adds that the entire company could be better off owned by a private equity firm.
The letter also says Bed Bath & Beyond executives received “outsized” compensation compared to the company’s actual performance.
In a statement issued early Monday, Bed Bath & Beyond’s board and management team said they “maintain a consistent dialogue with our shareholders and, 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.”
The statement goes onto the say the board is committed to acting in its shareholders’ best interests. The company said last year marked “the first year of execution of our bold, multi-year transformation plan, which we believe will create significant long-term shareholder value.”
In January, Bed Bath & Beyond reported its net sales for the third quarter of fiscal 2021 plunged 28%, with the company blaming supply chain problems as the chief culprit for the sharp decline.
The Union, N.J.-based company also announced plans to closing 37 more stores in 19 states, the latest phase in a campaign to shutter 200 locations over two years.
Bed Bath & Beyond President and CEO Mark Tritton said in BBB officials responded quickly to the changing conditions by adjusting its prices, optimizing its promotions and updating its product mix.