GameStop Chairman Cohen Acquires Stake in Bed Bath & Beyond and Promotes Strategic Alternatives

Exterior of a Bed Bath & Beyond store in Novi, Michigan, USA on January 29, 2021. REUTERS/Emily Elconin

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March 6 – Billionaire investor Ryan Cohen said Sunday he now owns almost 10% of Bed Bath & Beyond (BBBY.O) and wants the home goods retailer to explore strategic alternatives, including selling the company outright.

Cohen, who co-founded online pet retailer Chewy and is chairman of video game retailer GameStop Corp (GME.N), criticized Bed Bath & Beyond, which is worth an estimated $1.6 billion, for an “over-ambitious” strategy. , overpaying its top executives and failing to reverse market share losses.

“We believe that Bed Bath needs to narrow its focus to strengthen operations and maintain the correct inventory mix to meet demand, while exploring strategic alternatives that include splitting buybuy Baby, Inc. and selling the company outright,” Cohen wrote to the company’s board of directors. directors.

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Cohen said in a letter seen by Reuters that he owns 9.8% of Union, which is headquartered in New Jersey, through his investment company RC Ventures LLC. The company’s shares have fallen 43.55% in the last 12 months.

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

The Wall Street Journal first reported on the stake.

Cohen is pushing for the change after the three activists and the company reached an agreement in 2019 that added four new directors to the board. The group criticized the retailer for failing to adjust to the growing preference of shoppers to shop online.

Shortly after the settlement, the company hired Mark Tritton as CEO, but Cohen said Tritton was unable to handle supply chain volatility and led core sales to fall 14% year-over-year in the most recent quarter.

Still, Tritton has made about $27 million in the past two fiscal years, Cohen said, noting that that’s far more than the CEOs of much larger retail chains, including Macy’s, Kohl’s and Dollar Tree, earn.

The named executives of the company received a collective compensation of $36 million in the last financial year.

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

At Bed Bath & Beyond, Cohen wants the company to streamline what he calls a “scattered strategy” and consider spinning off the Buybuy Baby chain or selling the entire company, which he says would be better off owned by a private equity firm.

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Report by Svea Herbst-Beilis with an additional report by Akanksha Khushi of Bangalore; Editing: Christopher Cushing, Lincoln Fist and Kenneth Maxwell

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