Bed bath and beyond Inc.
said he would add three new directors and explore options for his buybuy Baby business as part of a deal with activist investor Ryan Cohen.
The deal announced on Friday comes after Mr Cohen sent a letter to the company criticizing the retailer’s turnaround strategy and calling for a spinoff from the buybuy Baby chain or a sale of the whole business. Mr. Cohen’s company, RC Ventures LLC, has an approximate 9.8% stake in Bed Bath & Beyond.
As part of the deal, three directors nominated by RC Ventures – Marjorie Bowen, Shelly Lombard and Ben Rosenzweig – would immediately join Bed Bath & Beyond’s board of directors, the company said. They would also stand for election at the society’s annual meeting, after which the board would revert to its current size of 11 members in total, Bed Bath & Beyond said.
Bed Bath & Beyond has hundreds of physical stores across the country and owns the Harmon chain of stores in addition to buybuy Baby. While its shares initially received a boost from the pandemic, they have fallen 23% over the past year.
Shares of Bed Bath & Beyond rose 6.7% to $23.57 in morning trading.
Two of the new independent directors, Ms. Bowen and Mr. Rosenzweig, would join a four-member strategy committee to explore alternatives to extract greater value from the company’s buybuy Baby business, which sells hardware, furniture, baby clothes and more.
As of November 27, Bed Bath & Beyond operated 133 buybuy Baby stores.
The segment has increased sales for four consecutive quarters, the company announced in January, and comparable sales increased in the third fiscal quarter, driven by double-digit growth in stores and high single-digit growth in the digital.
RC Ventures has also agreed to support the full slate of board directors at the annual meeting, the company said. “I appreciate that management and the board have been willing to quickly embrace our ideas and I look forward to supporting them in the coming year,” Cohen said in a statement.
Mr. Cohen, the billionaire co-founder of online pet products retailer Chewy Inc.,
gained a loyal following after building a big stake in GameStop and in November 2020 criticized the company for moving too slowly into e-commerce. He joined GameStop’s board of directors in January 2021, which contributed to the Reddit-fueled jump in his actions that followed, and took over as chairman in June 2021.
Write to Will Feuer at [email protected]
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