The company’s new CEO caused its shares to rise more than 11% in after-hours trading.
On Wednesday, shares of Bed Bath & Beyond jumped 21% after the company announced it chose Mark Tritton as its new CEO. Tritton has over 30 years of experience in the retail industry.
However, he’s best-known as the former executive vice president and chief merchandising officer at Target. During his time at Target, Tritton was responsible for improving the customer shopping experience. Tritton also led the company to revamp many of its stores and land significant partnerships with brands like Hunter Boots.
The Tritton hire could be precisely what Bed Bath & Beyond needs. It’s safe to say the company could use some revamping of its own. The stock is down 12% year to date due to declining sales.
The backstory on Bed Bath & Beyond
When Tritton will come on board as CEO of Bed Bath & Beyond as of Nov. 4. He’ll be replacing interim CEO Mary Winston, who will stay on as a member of the board.
This change in leadership is the result of several activist investors at Legion Partners Asset Management, Macellum Advisors, and Ancora Advisors. Collectively, these investors own a 5% stake in Bed Bath & Beyond and used their combined influence to push out former CEO Steven Temares.
Temares had served as company CEO since 2003, and the stock has been steadily declining since 2015. Over the past three years, the company’s stock lost an average of 37% per year. In comparison, the retail sector of the S&P 500 gained an average of 20% per year.
This decline prompted investors to act, and they wrote a letter stating that Temares “must be terminated as soon as possible.” Temares was terminated, and the company has been searching for a replacement CEO since May.
Is this the change the company needs?
Going forward, Bed Bath & Beyond still faces many headwinds due to tariffs and declining sales. The company needs to find a way to become competitive in the e-commerce landscape.
However, the board seems confident that Tritton is the right person for the job. The company released a statement saying that it chose Tritton because of his ability to drive growth and improve customer experience. His first order of business will be cutting costs and reversing the company’s negative sales trends.