May 13, 2019 / 12:54 PM / 8 days ago

UPDATE 2-Bed Bath & Beyond long-time CEO steps down following investor pressure

(Adds details on investor groups, updates share price, analyst quote)

By Soundarya J

May 13 (Reuters) - Bed Bath & Beyond Inc’s long-time Chief Executive Officer Steven Temares stepped down on Monday, following pressure from a group of activist investors that had been pushing for his ouster and a shakeup of the home goods retailer’s board.

The group, comprising Legion Partners Asset Management LLC, Macellum Advisors GP LLC and Ancora Advisors LLC, piled pressure on the company since March, citing its inability to grow sales and margins.

The retailer has struggled to keep pace with changing consumer tastes and shopping habits, reporting 1.1% growth in sales last year compared with over 22% in 2003, when Temares took over as CEO. The company’s shares have lost nearly 80% of their value in the past five years.

Temares also resigned as a member of the board, bringing its size to nine.

“The resignation of Steven Temares as CEO is a necessary first step in revitalizing the fortunes of the beleaguered retailer,” said Neil Saunders, managing director of GlobalData Retail.

Saunders, however, said he did not believe that the problems at the company were over, even with a new plan of action and leader at the helm.

Shares of the company were down about 3% in morning trade after a see-saw trade before the bell.

The retailer named Mary Winston, former chief financial officer at Family Dollar Stores Inc and currently on Bed Bath’s board, as interim CEO. The board has started a search for a permanent CEO, the company said in a statement.

The company also named Andrea Weiss as the chair of business transformation and strategy review committee.

Weiss and Winston were two of the five newly appointed independent members on the company’s board. The shake-up, however, did not please the investors, who declined an invitation to participate in the transformation of the board.

The investors have also criticized excessive pay packages at the housewares seller.

Last week, the investor group also filed a lawsuit against the company while also reducing its slate of nominees to the board to 10 members, from 16, given the company’s reduction in size of board.

Bed Bath & Beyond remains open to engaging with the activist group, a source familiar with the matter told Reuters.

The company had earlier said it had tried to settle with the investor group on several occasions.

The investor group did not immediately respond to a request for comment. (Reporting by Soundarya J and Aishwarya Venugopal in Bengaluru; Editing by Shailesh Kuber and Saumyadeb Chakrabarty)

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