Bed Bath & Beyond Inc.
said it would add three new directors and explore options for its buybuy Baby business as part of an agreement with activist investor
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—
—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.
Bed Bath & Beyond has hundreds of physical stores around the country and owns the Harmon retail chain 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 unlock greater value from the company’s buybuy Baby business, which sells baby gear, furniture, clothes and more.
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 midteens in the fiscal third quarter, driven by double-digit growth in stores and high-single digit growth in digital.
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
has gained a loyal following after he built a big
stake and in November 2020 criticized 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.
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