The CEO of Bed Bath & Beyond has resigned following pressure from an activist investor.
“Following the recent acquisition of the Bed Bath & Beyond brand and our corporate renaming as Beyond, Inc., the Board and Jonathan determined that this is the ideal time for a transition in leadership to guide the company forward,” Allison H. Abraham, chair of the company’s board, said in a news release.
However, the announcement comes days after hedge fund JAT Capital called for Johnson’s removal in a letter to the company included in a regulatory filing.
“He has performed poorly (as demonstrated by the company’s financials relative to its peer group), he has communicated poorly with investors and the sellside community, and he has recently taken actions that give the appearance that his own interests are being prioritized,” the letter said.
David Nielsen will become the company’s interim CEO and president, per the announcement.
Overstock, an online home furnishings seller, acquired BBBY’s intellectual property, some of its digital assets and its name after winning an auction in June.
“This acquisition is a significant and transformative step for us,” then Overstock CEO Johnson said in the release. “Bed Bath & Beyond is an iconic consumer brand, well-known in the home retail marketplace. The combination of our winning asset-light business model and the high awareness and loyalty of the Bed Bath & Beyond brand will improve the customer experience and position the company for accelerated market share growth.”
In an interview with PYMNTS Karen Webster in July, Johnson said he was surprised there weren’t more bidders for BBBY.
“We saw real value in the brand and the customer list,” he said. “It’s an iconic brand that we wanted to save. It’s a customer list that matches well with ours — not a lot of overlap, but the demographic is someone that’s with us.”
While Overstock saw that the Bed Bath and Beyond business model was outdated, the company realized the potential to spend very little to more or less shed the “anchor” of the Overstock brand name and diversify its product lines to include the bedroom, kitchen and bath, items that people buy much more often than patio furniture or a new living room sofa.
Customer research and polls discovered that while shoppers were turned off by the shift in-store product and merchandising strategy, the brand itself was still well-liked.
“We’ve taken a name that’s beloved and a business model that wasn’t working to bring Bed Bath and Beyond to the 21st century where brick and mortar is tougher, online is better and mobile is a way that people want to shop,” Johnson said at the time.
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