Bed Bath & Beyond will add four new directors to its leadership board, the company said on Wednesday, a decision that ends a months-long standoff between the retailer and a group of activist investors.
Continue Reading Below
The announcement and subsequent board upheaval come as the Union, New Jersey-based company seeks to revamp its operations to better compete against online upstarts.
|BBBY||BED BATH & BEYOND INC.||9.90||+0.15||+1.54%|
The top executive at Bed, Bath & Beyond recently resigned, spurring a search for a new CEO. And of the now 13 new directors, 12 joined the board within the past two years, bringing with them a "rich diversity of perspectives, backgrounds, ages, gender, race and ethnicity," according to independent chairman Patrick Gaston.
"We believe that our refreshed Board is well-equipped to oversee and drive the business transformation underway, and we look forward to working tirelessly on behalf of all shareholders to create significant value," he said in a statement.
Legion Partners Asset Management LLC, Macellum Advisors GP LLC and Ancora Advisors LLC -- which together own roughly 5.32 percent of the company's stock -- tried previously to force Bed, Bath & Beyond to overhaul its entire 12-person board and approve a slate of 16 nominees.
Wednesday's announcement is "the result of collaborative dialogue and intensive engagement," the group said in a statement. "These four new independent directors will help the Company navigate the current omnichannel retail environment and pursue our shared goal of enhancing shareholder value."
Analysts say the compromise increases the likelihood that Bed Bath & Beyond will ultimately cave to the activists' overall agenda for the retail chain.
"The CEO search remains ongoing and the ultimate successor's transformation track record will be key," Jefferies analyst Jonathan Matuszewski wrote in a note.
Alongside the new directors, Bed Bath & Beyond and the investor group entered into a "cooperation and support agreement" that includes the resolution of a lawsuit brought against the company.
Joining the board are retail advisors John Fleming and Sue Gove, former Gap executive Jeffrey Kirwan and private investor Joshua Schechter. All were nominated by the investor group.