Cohen’s company RC Ventures has acquired nearly 10% of Bed Bath & Beyond (BBBY), making the investment firm one of the top five shareholders, Cohen said in a letter to the retail chain’s board of directors on Sunday.
Shares of Bed Bath & Beyond rose about 40% in early trading on the Monday after the announcement, before falling to about 34% at noon.
Cohen, who acquired a stake in GameStop (GME) in 2020 and became the company’s chairman last year, clearly wants to shake things up. In his letter to the board of directors, he criticized Bed Bath & Beyond’s current strategy and urged the company to make changes.
Bed Bath & Beyond is “struggling to reverse sustained market share losses, halt years of declines in share prices and manage supply chain volatility,” Cohen wrote to the board, adding that the “oversized” financial compensation of company executives falls short of results. company activities. .
In a response to Cohen, Bed Bath & Beyond said on Monday it would “thoroughly consider” his letter and “hope to constructively discuss the ideas” he proposed.
Cohen, who also founded online pet supply retailer Chewy (CHWY), also wrote that Bed Bath & Beyond is trying to execute too many “burdensome” plans at once and should instead “narrow focus” to priorities like improving the supply chain and product mix. . He also recommended that the company consider spinning off its Buy Buy Baby stores or even look for a buyer that would take the entire company private.
While many activist shareholders seek to take over as director of the board of directors to make an impact, Cohen himself will not do so due to his role as chairman of GameStop. But he did not rule out the appointment of new board members or new management.
Bed Bath & Beyond has struggled in recent years with pressure from Amazon (AMZN) and big chains like Walmart (WMT) and Target (CBDY). In 2019, the company hired CEO Mark Tritton of Target, who formed a new leadership team and implemented new strategies such as refurbishing stores and reducing product options.
The retailer did enjoy keeping shoppers at home doing renovations during the pandemic, but its revival has stalled in recent months. In January, the company reported a quarterly decline in sales, despite the fact that competitors have made significant gains. Bed Bath & Beyond said it was hit hard by supply chain disruptions.