Bed Bath & Beyond CEO out amid ongoing activist pressure
The longtime chief executive of Bed Bath & Beyond has stepped down amid ongoing pressure from activist investors who blame him for the chain’s faltering performance and are pushing for changes.
The home goods chain announced that Steven Temares has stepped down as CEO and resigned as a member of the board, effective immediately. Mary Winston, who recently joined the board, has been appointed interim chief while the company searches for a permanent replacement. In addition, new board member Andrea Weiss, a longtime retail executive and consultant, will oversee the company’s strategy and business transformation plans and work closely with Winston.
Winston’s previous retail experience includes serving as executive VP and CFO of Family Dollar Stores Inc. and senior VP and CFO of Giant Eagle. She also served as executive VP and CFO at Scholastic Corporation. In searching for a permanent leader, Bed Bath & Beyond said it will focus on individuals who have transformation and innovation experience “in the retail sector.
“Bed Bath & Beyond has a significant opportunity to drive value creation by building on its great brands and strong customer affinity,” said Patrick Gaston, independent chairman of the board. “As the company continues its efforts to improve its financial performance and enhance its competitive position, the board determined that now is the right time to identify the next generation of leadership.”
Temares, a 27-year Bed Bath & Beyond veteran, has been CEO of the chain since 2003. The management shake-up comes as Bed Bath & Beyond has been under mounting pressure from a group of activist investors — Legion Partners Asset Management, Macellum Advisors and Ancora Advisors — to replace the entire board and to oust Temares. The group has been outspoken in its criticism of Bed Bath & Beyond ‘s performance and recently released a 100-plus page document that detailed Bed Bath & Beyond’s “stale retail perspective” and called for the immediate removal of Temares, blaming him for more than a decade of underperformance.
Prior to releasing the document, the group launched an effort to replace Bed Bath & Beyond’s entire 12-person board with a slate of 16 nominees. In response, the chain announced that two members would depart the board, decreasing the size to 10. (The retailer noted that with the departure of Temares, the board goes down to nine members). investors labeled the move as “too little, too late.” Last week, Legion Partners filed a lawsuit against Bed Bath & Beyond, saying that the company bypassed shareholder rights in overhauling the slate of directors.
Analyst Neil Saunders, managing director of GlobalData Retail, commented that the resignation of Temares as CEO is a “necessary first step in revitalizing the fortunes of the beleaguered retailer.” He noted that under Temares, the chain lost market share as it fell behind peers and failed to keep pace with a changing homewares market.
“However, as we have said before, shuffling the management team will not, in and of itself, produce the change that is required,” Saunders said. “As such, Bed Bath & Beyond now needs to search for a leader who can put in place a plan to refashion the company to the modern realities of retailing.”
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