Bed Bath & Beyond (NYSE:BBY) surged more than 100% in premarket trading Monday after GameStop (NYSE:GME) Chairman Ryan Cohen revealed he had a nearly 10% stake in the retailer, through his investment company RC Ventures.
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 months-long 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 (NASDAQ:AMZN)
BBY shares hiked $2.92,. or 2.8%,to $109.02 soon after Monday's open.
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