GameStop’s Cohen Takes Share in Bed Bath & Beyond, Pushes for Changes

An exterior view showing the Bed Bath & Beyond store in Novi, Michigan, US, January 29, 2021. REUTERS/Emily Elconin

(Reuters) – Billionaire investor Ryan Cohen said Sunday that he now owns nearly 10% of Bed Bath and Beyond. (BBBY.O) He wants the home appliances retailer to explore strategic alternatives that involve a complete sale of the company.

Cohen, who co-founded online pet retailer Chewy, is chairman of the board of video game retailer GameStop Corp. (GME.N)Bed Bath & Beyond, valued at about $1.6 billion, has been criticized for an “overly ambitious” strategy, overpaying senior executives and failing to reverse market share losses.

“We believe Bed Bath needs to narrow its focus to enhance operations and maintain the right inventory mix to meet demand, while simultaneously exploring strategic alternatives that include detaching buybuy Baby, Inc and selling the entire company,” Cohen wrote to the company’s board of directors. of the members of the Board of Directors.

In the letter, seen by Reuters, Cohen said he owns 9.8% of Union, which is headquartered in New Jersey, through his investment firm RC Ventures LLC. Bed Bath & Beyond shares are down 43.55% in the past 12 months.

“Although there has been no prior contact with RC Ventures, we will carefully review their letter and hope to engage constructively around the ideas they have put forward,” Bed Bath and Beyond said in a statement.

Shares of the company rose more than 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 in which four new directors were added to the board. The group criticized the retailer for failing to adapt to shoppers’ growing preferences for online shopping.

Soon after the settlement, the company appointed Mark Triton as CEO, but Cohen said Triton failed to weather supply chain volatility and led to a 14% decline in core sales from a year ago in the fourth quarter.

Cohen said Triton still earned nearly $27 million over the past two fiscal years, noting that it’s been much more than CEOs at largest retailers including Macy’s, Kohl’s and Dollar Tree have earned.

The company’s appointed executives were collectively awarded $36 million in compensation in the past fiscal year.

Cohen said he’s focused on the long-term and won’t criticize management for laying the foundation for future value creation, emphasizing his own style at GameStop where he offered few details about how he plans to revive the company.

At Bed Bath & Beyond, Cohen wants the company to simplify what he calls a “dispersal strategy” and consider detaching the buybuy Baby chain or selling the entire company, which he says may be privately owned by the equity firm.

Additional reporting by Svia Herbst Bayliss with additional reporting by Akanksha Khushi and Deborah Sophia in Bengaluru; Editing by Christopher Cushing, Lincoln Fest, Kenneth Maxwell and Shinjini Ganguly

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