Customers carry bags from Bed Bath & Beyond store on April 10, 2013 in Los Angeles, California.
Kevork Djansezian | Getty Images News | Getty Images
Cohen, who also co-founded online pet retailer Chewy, wrote in a letter to Bed Bath’s board that he believes the retailer is struggling to reverse market share losses and to navigate supply chain woes. He also criticized top executives, including Bed Bath Chief Executive Mark Tritton, for reaping excessive compensation during periods of underperformance.
“We believe Bed Bath needs to narrow its focus to fortify operations and maintain the right inventory mix to meet demand, while simultaneously exploring strategic alternatives that include separating Buybuy Baby, and a full sale of the company,” said Cohen.
In response to the letter, which Bed Bath said it received Sunday evening, the big-box retailer said that it has had no prior contact with RC Ventures.
“We will carefully review their letter and hope to engage constructively around the ideas they have put forth,” Bed Bath said in a statement. “2021 marked the first year of execution of our bold, multi-year transformation plan, which we believe will create significant long-term shareholder value.”
Cohen’s push for changes at Bed Bath comes after the retailer in 2019 settled a monthslong spat with a trio of activist investors in which four new members where added to its board. At the time, the activist group criticized Bed Bath’s e-commerce presence relative to peers including Amazon.
Soon after that settlement was reached, the retailer brought on Tritton, a former Target executive, as CEO. His appointment sparked hope among investors that a turnaround was in the works, given Tritton’s deep merchandising experience and success at Target.
Since taking the helm of the company, Tritton has embarked on closing hundreds of underperforming Bed Bath locations, selling noncore assets including Cost Plus World Market and Christmas Tree Shops, ramping up stock buybacks, remodeling stores, debuting numerous private labels, and more recently navigating Bed Bath through a pandemic.
Cohen, however, said Bed Bath’s “scattershot strategy” isn’t working. He said the company could be better suited with a private equity owner, and he also contends that the company’s Buybuy Baby chain could be worth several billion dollars.
With a nearly 10% stake in Bed Bath, that makes Cohen a top five shareholder in the retailer, which had a market value of roughly $1.6 billion as of Friday’s market close. Bed Bath shares have dropped nearly 45% in the last 12 months.
Cohen said in his letter that given his focus on GameStop, he isn’t in a position to become a Bed Bath director himself. But he said this doesn’t prevent him from holding the board and management accountable.
Cohen joined GameStop’s board in January 2021, contributing to a Reddit-fueled surge in the video game retailer’s shares, and took over as chairman in June of that year. He co-founded Chewy in 2011 and served as its CEO through 2018.