Bed Bath & Beyond Inc.
BBBY 2.22%
said it would add three new directors and explore options for its buybuy Baby business as part of an agreement with activist investor
Ryan Cohen.
The agreement announced Friday comes after Mr. Cohen sent a letter to the company criticizing the retailer’s turnaround strategy and calling for a separation of the buybuy Baby chain or a sale of the entire company. Mr. Cohen’s firm, RC Ventures LLC, owns a roughly 9.8% stake in Bed Bath & Beyond.
As part of the agreement, three RC Ventures’ director designees—
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 company’s annual meeting, after which the board would revert to its current size of 11 members in total, Bed Bath & Beyond said.
The annual meeting is expected to be held in July, the company said in a securities filing.
Bed Bath & Beyond has hundreds of physical stores around the country and owns the Harmon retail chain in addition to buybuy Baby.
Shares of Bed Bath & Beyond closed Friday at $22.59, up 2.2% The stock has gained about 55% this year.
Two of the new independent directors, Ms. Bowen and Mr. Rosenzweig, would join a four-member strategy committee to explore alternatives to unlock greater value from the buybuy Baby business, which sells baby gear, furniture, clothes and more.
Potential alternatives for the business could include a spinoff or sale. Current independent directors
Andrea Weiss
and
Sue Gove
will also serve on the strategy committee, with Ms. Gove serving as its chair.
Ryan Cohen’s firm owns a roughly 9.8% stake in Bed Bath & Beyond.
Photo:
Mark Abramson for The Wall Street Journal
As of Nov. 27, Bed Bath & Beyond operated 133 buybuy Baby stores. The segment has grown sales for four consecutive quarters, the company said in January, and comparable sales increased in the fiscal third quarter by a midteen percentage.
RC Ventures also agreed to support the board’s full slate of directors at the annual meeting, the company said.
“I appreciate that management and the Board were willing to promptly embrace our ideas and look forward to supporting them in the year ahead,” Mr. Cohen said in a statement.
Mr. Cohen, the billionaire co-founder of online pet-products retailer
Chewy Inc.,
has gained a loyal following after he built a big
GameStop
stake and in November 2020 went public with criticism of the company for moving too slowly toward e-commerce.
He joined GameStop’s board in January 2021, which contributed to the Reddit-fueled jump in its shares that followed, and took over as chairman in June 2021.
Write to Will Feuer at [email protected]
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