- Bed Bath & Beyond is slashing 7% of its corporate staff as the struggling company attempts to repair its business.
- Activist investors released a presentation in late April slamming Bed Bath & Beyond for everything from messy stores to CEO pay.
- Slide after slide of the presentation described different parts of the company that activist investors believed to be “broken.”
- Here are 10 of the most brutal criticisms investors lobbed at Bed Bath & Beyond.
- Visit Business Insider’s homepage for more stories.
Bed Bath & Beyond is cutting corporate staff as it attempts to fix its business.
On Tuesday, the company announced it would cut approximately 7% of its corporate staff as part of its “business transformation,” following a review of its office cost structure. The move comes after a series of internal changes at the company, including the departure of CEO Steven Temares in mid-May.
In late April, a group of activist investors – Legion Partners, Macellum Capital Management, and Ancora Advisors – released a brutal presentation slamming Bed Bath & Beyond’s leadership.
The 168-slide presentation took issue with problems as varied as executive compensation and clutter in stores’ aisles. Slide after slide described different parts of the company that activist investors said were “broken.”
Bed Bath & Beyond said at the time that it was already taking action on many of the issues highlighted by the activist investors.
“Upon our initial review, it appears that most of the operational areas targeted for improvement include actions the company is already taking as part of its transformation plan, which are already well underway or have been substantially completed,” the company said in a statement.
“Other target areas identified include actions that have been, and continue to be, considered by Bed Bath & Beyond. The company will provide a more detailed response at the appropriate time.”
Here are 10 of the most savage criticisms investors lobbed at Bed Bath & Beyond in the April presentation:
Many of the most brutal criticisms centered on what they called Bed Bath & Beyond’s “poor shopping environment that is neither experiential nor curated.”
The presentation also put it more bluntly: “Stores are a mess.”
More snark from the same slide: “Customers need to be able to walk down the aisle to purchase the product.”
The presentation described the scene as “random assortments shoved into fixtures.”
Trash cans also proved to be a major problem for investors, who described stores as “garbage cans galore.”
Apparently many customers complain about clutter, with the investor group citing a proprietary survey of 682 shoppers.
One respondent reportedly said: “The aisles are often too narrow and/or overcrowded with product. I’m not a huge fan of the crowded feeling in the store, which makes me not want to spend a lot of time browsing while I’m in there.”
Investors cited a Business Insider article with the headline “Bed Bath & Beyond’s stores have been slammed as ‘devoid of inspiration’ and ‘a mess.’ We went shopping there and found it completely overwhelming.”
Stores’ merchandise assortment was slammed as “weak.”
Stores were found to lack “innovation and exclusive products that can drive traffic,” the presentation said.
Bed Bath & Beyond’s leadership was also criticised by investors.
“Under the current CEO, the company’s operational performance is deteriorating at an accelerating pace and he must be removed immediately and replaced with a highly qualified and capable leader,” the presentation said.
Executives received “Best-in-Class Pay for Worst-in-Class Performance,” the presentation said.
Temares’ base salary was $US4 million in 2017, compared with an average of $US1.3 million for CEOs at rival retailers. Temares’ base pay was cut to $US500,000 in fiscal 2018, though the presentation noted that this wasn’t a permanent change.
Investors further took issue with the board’s perks as “excessive.”
The presentation said the company paid the cochairs and former co-CEOs Warren Eisenberg and Leonard Feinstein “$US229,850 for car and car service allowances and $US63,700 for personal tax preparation needs, respectively … in 2017.”
Eisenberg and Feinstein left the company’s board in late April. On May 1, five new independent directors joined the Bed Bath & Beyond board.
Business Insider Emails & Alerts
Site highlights each day to your inbox.