Investor group outlines strategic plan for Bed Bath & Beyond
Legion Partners Holdings, Macellum Advisors GP and Ancora Advisors released a presentation outlining the Investor Group’s Strategic Plan for Bed Bath & Beyond (BBBY).
The group said, “The plan outlines the path forward to modernizing Bed Bath’s retail practices and delivering a significant earnings per share improvement which could drive $5.00 per share of annual earnings – a level that Bed Bath achieved just a few short years ago.
The Investor Group’s Strategic Plan includes the following highlights: Revamp executive management – recruiting a top-flight CEO to lead Bed Bath going forward and instill a world-class winning culture.
We plan to launch a search in the near term to address this key position. Reverse sales weakness – fixing the merchandise over-assortment problem through a detailed SKU rationalization process as well as developing a merchandise architecture that will better resonate with customers.
Making the in-store experience something that drives traffic to the stores will be a major priority.
Turn around Company culture – increase focus on employee training and education to improve motivation; empower employees to better use technology and improve customer experience.
Significantly expand gross margins – improve vendor relations and drive profits by establishing a direct sourcing strategy and private label program as well as fixing mix issues created by the Company’s shift to commoditized and lower margin products.
Implement cost cutting – conducting an extensive reassessment of the increases in expenses over the last five years, including the explosion of the Company’s advertising budget, seemingly endless array of initiatives that have failed to produce meaningful results and extensive use of consultants.
Improve inventory – increasing inventory turns which would result in a substantial release of cash tied up in slow moving goods. Fix capital allocation – reviewing all non-core businesses and assessing their value as part of the business or their potential value to other parties.
Excess cash created could be applied to share or debt repurchases, both of which are significantly accretive given discounted trading levels.
Lastly, the increase in capital expenditures will be addressed. Above all, the Investor Group’s director nominees have the relevant experience and commitment to execute on these priorities and hold management accountable for delivering results.”
BBBY last traded at $16.68
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