GameStop President Cohen Takes Stake in Bed Bath & Beyond, Proposes Strategic Alternatives

An exterior view shows a Bed Bath & Beyond store in Novi, Michigan, U.S., January 29, 2021. REUTERS/Emily Elconin

March 6 (Reuters) – Billionaire investor Ryan Cohen said on Sunday he now owns nearly 10% of Bed Bath & Beyond and wants the homewares retailer to explore strategic alternatives that include a complete sale of the business.

Cohen, who co-founded online pet products retailer Chewy and is chairman of the board of video game retailer GameStop Corp , criticized Bed Bath & Beyond, which is worth around 1.6 billion, for an “overambitious” strategy, overpaying its top executives and failing to reverse market share losses.

“We believe Bed Bath needs to focus on consolidating its operations and maintaining the right inventory mix to meet demand, while simultaneously exploring strategic alternatives which include separating from 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-based company through his investment firm RC Ventures LLC. Shares of the company have fallen 43.55% over the past 12 months.

Bed Bath & Beyond and Cohen did not immediately respond to requests for comment.

The Wall Street Journal first reported the issue.

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 blamed the retailer for failing to adapt to shoppers’ growing preferences for buying online.

Shortly after the settlement, the company hired Mark Tritton as CEO, but Cohen said Tritton failed to manage supply chain volatility and presided over a 14% decline in sales. basis compared to a year ago during the last quarter.

Still, Tritton has received about $27 million over the past two fiscal years, Cohen said, noting that’s far more than CEOs earn at much larger retailers, including Macy’s, Kohl’s and Dollar Tree.

The company’s named executive officers collectively received compensation of $36 million in the past fiscal year.

Cohen said he was focused on the long term and would not criticize management for laying the groundwork for future value creation, pointing to his own style at GameStop where he gave few details on how he plans to resurrect the business.

At Bed Bath & Beyond, Cohen wants the company to streamline what he calls a “dispersion strategy” and consider splitting off the buybuy Baby chain or selling the entire business, which he says could do better. belong to a private equity firm.

Reporting by Svea Herbst-Baylis with additional reporting by Akanksha Khushi in Bengaluru; Editing by Christopher Cushing, Lincoln Feast and Kenneth Maxwell

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