Bed Bath & Beyond announced Friday that it has struck a deal with activist investor Ryan Cohen, sending shares of the company up about 6% in premarket trading.
The home goods retailer said in a news release that three people chosen by Cohen’s firm, RC Ventures, will immediately join Bed Bath’s board as independent directors. They include Marjorie Bowen, Shelly Lombard, and Ben Rosenzweig.
The company said a four-person committee will look into alternatives for its Buybuy Baby chain and make recommendations to the board. That committee will include Bowen and Rosenzweig.
Bed Bath has been in the middle of a turnaround effort led by former Target executive Mark Tritton, who took the helm in 2019. That has included a overhaul of many aspects of the company, including a heavier emphasis on private label, store remodels and closures of underperforming locations. The retailer also sold other store banners, Christmas Tree Shops and Cost Plus World Market, to focus on its namesake brand.
Bed Bath’s stock performance has lagged, even as the pandemic fueled a hot real estate market and inspired Americans to invest in their homes. Shares are down about 23% over the past year. They closed Thursday at $22.10, bringing the company’s market value to $2.13 billion.
Earlier this month, Cohen, who is also the chairman of GameStop, revealed a nearly 10% stake in Bed Bath and his intentions to push the retailer to make sweeping changes. In a letter, he criticized Bed Bath’s leaders for racking up high pay while struggling to turn around the retailer’s performance. He called for a shakeup in its operations, including a closer look at spinning off or selling its baby store chain.
On Friday, Tritton said the company’s leaders “look forward to integrating our new directors’ ideas to drive our continued transformation” as part of the deal with RC Ventures.
“As we move forward, our goals will continue to focus on delivering value for our shareholders, enhancing experiences for our customers, executing on the transformation throughout our business, and creating new and exciting opportunities for our dedicated employees across all our banners,” he said in the news release.
Cohen called the resolution “a positive outcome for all of Bed Bath’s shareholders.”
“I appreciate that management and the Board were willing to promptly embrace our ideas and look forward to supporting them in the year ahead,” he said in the news release.
This story is developing. Please check back for updates.
