In unison with reporting disappointing first quarter results last week, Bed Bath & Beyond Inc. revealed its president and CEO Mark Tritton was leaving the company.
“Our performance today requires an adjustment to strategy and a deep focus on basic operational execution,” Harriet Edelman, independent chair of the board, said during the retailer’s earnings call, after thanking Tritton for his contributions.
The former Target executive took the post on November 4, 2019, and shook up the retailer’s senior leadership shortly after, including the then chief marketing officer (CMO). The company later named Joe Hartsig as EVP, CMO of Bed Bath & Beyond and president of Harmon Stores in March 2020. In tandem with Tritton’s departure, the retailer announced Joe Hartsig is also leaving the company.
Sue Gove, an independent director on the company's board and chair of the board's strategy committee, has been named interim CEO, replacing Tritton, who is also leaving his position the board. Mara Sirhal will step in as EVP and CMO. Sirhal was Bed Bath & Beyond's SVP and general manager for Harmon, as well as the general merchandise manager of Health, Beauty & Consumables.
The changes come as Bed Bath & Beyond posted net sales of $1.5 billion in its Q1 2022, which reflects a decline of 25% and a comp sales decline of 23% versus last year. The company said it will slash planned capital expenditures by a minimum of $100 million to approximately $300 million, and launched new loyalty program, Welcome Rewards, for $29 per year.
“We just launched our loyalty program as a test,” Grove said on the call, and “we’re very excited about the early reads.”
Grove also noted the next several months are critical for the retailer to take action around balancing its assortment, driving traffic, sales, inventory, costs, and the balance sheet. The board has retained Berkeley Research Group (BRG), a retail advisory firm, to focus on cash, inventory and balance sheet optimization.
CFO Gustavo Arnal noted the company does think it’s important within the $300 million Cap Ex to protect spending related to system capabilities, supply chain capabilities, and technology capabilities. “We’re living in a very challenging and dynamic world, and there is still a need to modernize the company.”
Search for a new CEO
The company’s board has also retained Russell Reynolds, a nationally recognized search firm, to commence a search process for the permanent chief executive officer role.
When asked by an analyst on the call what criteria the company is emphasizing on this search for a CEO different from the prior search, Edelman replied “we want a focus on merchant skills, modern retailing, digital and omni capabilities, but sharp skills and emphasis on operations execution, cost effectiveness and balance sheet.”
Edelman said of the CEO change in a press release, "our banner's heritage is built on the premise that when customers are shopping for the home, Bed Bath & Beyond is the perfect destination for unique solutions and inspiration. We must deliver that proposition for customers, drive growth, and unlock the value of the banners. Today's actions address company performance, the macroeconomic conditions under which we are operating, and the expectations of the Board on behalf of shareholders. We are committed to addressing the urgent issues that have been impacting sales, profitability, and cash flow generation. We are confident Sue brings the right combination of industry experience and knowledge of Bed Bath & Beyond's operations to lead the company, focus our resources, and revise strategy, as appropriate."