Bed Bath & Beyond shuffles board, reduces activist investor pressure
Bed Bath & Beyond is appeasing activist investors by adding some high-profile independent directors to its board.
The specialty home furnishings retailer has appointed four new independent directors to its board as part of what it calls the board’s continued transformation. With these appointments, the board will comprise 13 directors. Twelve of the current directors have joined within the past two years, 12 are independent and seven are women.
The four new directors are John E. Fleming, former chief merchandising officer and chief marketing officer of Walmart Inc. and former global e-commerce CEO of Uniqlo Co. Ltd.; Jeffrey A. Kirwan, former global president and CEO of the Gap division of The Gap Inc.; Sue E. Gove, president of Excelsior Advisors LLC, senior advisor to Alvarez & Marsal, and former president and CEO of Golfsmith International Holdings Inc. and COO of Zale Corp.; and Joshua E. Schechter, private investor and public company director, former chairman of several public boards and former co-president of Steel Partners Japan Asset Management.
These appointments follow transformational changes made by the Bed Bath & Beyond board of directors. The board's recent changes and ongoing actions include appointing nine new independent directors to the board, appointing Patrick Gaston as independent chair of the board; appointing Mary Winston, a former CFO at Family Dollar and Giant Eagle who recently joined the board, as interim CEO; actively searching for a permanent CEO with a dedicated CEO search committee, and creating a business transformation and strategy review committee.
In connection with the appointments of the four new independent directors, Bed Bath & Beyond has entered into a cooperation and support agreement with a group of activist investors - Legion Partners, Macellum Capital Management and Ancora Advisors -- known as the Investor Group, which together owns approximately 5.23% of the company's outstanding common stock. Under the terms of the agreement, the Investor Group has agreed to withdraw its slate of 10 nominees and support and vote in favor of all of the Bed Bath & Beyond-recommended director nominees at the 2019 and 2020 annual meetings of shareholders, which will include the four new independent directors appointed today. Litigation filed by Legion Partners over its proxy campaign to elect new directors is also being withdrawn and dismissed.
Activist investors have been pressuring Bed Bath & Beyond for months, releasing a 100-page document that accused the retailer of a “stale retail perspective” and calling for the removal of former CEO Steven Temares. Temares stepped down earlier this month.
“We appreciate the work undertaken by the Investor Group and their contributions and are excited to work collaboratively with all of our board members and our shareholders to embrace opportunities to create lasting value for the company and all its stakeholders,” said Gaston. “We believe that our refreshed board is well-equipped to oversee and drive the business transformation underway, and we look forward to working tirelessly on behalf of all shareholders to create significant value."
"Bed Bath & Beyond is an iconic retailer with great brands, strong customer affinity and hardworking associates,” said Winston. We are at an important inflection point in the company's history, and with the benefit of a newly transformed board, the company is committed to taking the right actions to further enhance our competitive and financial position, transform Bed Bath & Beyond faster to win in the omnichannel marketplace and execute on our priorities."