UPDATE: JULY 24, 2019 — BB&B ANNOUNCES A 7% REDUCTION IN FORCE
It appears the activist investors have forced the company to trim costs resulting in a 7% reduction in the company’s workforce which includes the President and Chief Operating Office as well as vice presidents, directors, managers and professional staff.
Interim CEO and Board Member Mary Winston noted, “While decisions that impact our staff are difficult, today’s action is an important step in simplifying our corporate structure and ensuring our resources are aligned with the business we are managing today. We remain confident in the underlying business and our ability to leverage the strength of the Bed Bath & Beyond brand and our lasting connection with customers to deliver on our near-term priorities and transform the company.”
Driving the decision was a net loss of $371.1 million for the quarter ended June 1, 2019 and a 6.6% downturn in net sales.
Union, New Jersey-based Bed Bath & Beyond Inc, a discounter of household retail merchandise, has announced that their CEO, Steven Temares, has resigned after three activist investors (Legion Partners Asset Management LLC, Macellum Advisors GP LLC and Ancora Advisors LLC) excoriated the company’s leadership, business model, and operations. The activists are demanding that the retailer adopt changes to its business model to cope with the increasing sales pressure of e-commerce as well as reduce costs.
From a transition statement…
“Patrick Gaston, Independent Chairman of the Bed Bath & Beyond Board, stated, ‘Bed Bath & Beyond has a significant opportunity to drive value creation by building on its great brands and strong customer affinity. 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. We are fortunate to have someone of Mary's caliber to serve as Interim CEO while the Board conducts a search for a permanent successor, and are confident in her ability to lead the Company forward during this transition period.’"
“Ms. Winston said, "This is an important time for Bed Bath & Beyond and we are committed to being the leading omnichannel retailer of choice for the home and heart-felt life events. Together with the Board, including the members of the Business Transformation and Strategy Review Committee, the leadership team and our more than 60,000 associates, I look forward to building an even stronger future for Bed Bath & Beyond. As we continue to review our business initiatives, we will be focused on driving continued margin improvement, enhancing the in-store and online experience, and accelerating our transformation to the benefit of our shareholders, customers and other stakeholders."
About Mary Winston …
“Ms. Winston is a seasoned executive with significant governance expertise across a broad range of industries, having served on large public company boards and audit committees for many years. She has a strong background in all aspects of finance and accounting, as well as experience in M&A, corporate strategy, cost restructuring programs, corporate governance/compliance, and investor relations/communications. Among other roles, she has served as Executive Vice President and Chief Financial Officer at Family Dollar Stores Inc., Senior Vice President and Chief Financial Officer at Giant Eagle, Inc., Executive Vice President and Chief Financial Officer at Scholastic Corporation, Vice President and Controller of Visteon Corporation and Vice President, Global Financial Operations at Pfizer Inc. in the Pharmaceuticals Group. She started her career as a CPA and auditor at Arthur Andersen & Co. Ms. Winston is a National Association of Corporate Directors (NACD) Board Governance Fellow. She currently serves as President at WinsCo Enterprises Inc., a financial and board governance consulting firm.”
As you can see Winston is all about finance and cost-cutting, leaving the real estate and merchandising decisions to others. Since she is not giving up her own company to join Bed Bath & Beyond, she is most likely the hired gun to execute major changes before a permanent CEO is named.
Activist investors, new board members, and a change in senior leadership almost always foretells a reduction in force to curtail costs and to signal to Wall Street that changes are afoot. Time for employees to be vigilant.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life, or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere ... are you now wondering, Am I Next?