Investors loaded their carts with Bed Bath & Beyond stock Tuesday after a hedge fund triumvirate called for an overhaul of the board and an ousting of its chief executive.
Shares climbed as much as 30 percent early Tuesday after three hedgies unveiled a slate of 16 candidates to replace Bed Bath & Beyond’s 12-person board, claiming the current board is “entrenched” and displays a “lack of retail expertise.”
The trio also argued that longtime Chief Executive Steven Temares should be replaced, saying his salary vastly exceeds that of his peers even as Bed Bath & Beyond’s stock has fallen due to sagging sales.
The stock is down 55 percent over the last two years as same-store sales have declined for the last seven quarters.
In an 18-page regulatory filing, hedgies blasted Bed Bath & Beyond as having “lost touch with modern retail.” The company relies too much on promotions to draw shoppers into stores — only to greet them with a “dizzying array of too similar items,” the filing said.
“The time is now to instill best-in-class corporate governance and hold management and directors accountable for the horrendous performance that has resulted in $8 billion of value destruction over the last 15 years at Bed Bath & Beyond,” Chris Kiper, co-founder and managing principal of Legion Partners, said in the filing.
Legion Partners is joined by Macellum Advisors and Ancora Advisors to hold a roughly 5 percent stake in Bed Bath & Beyond.