New York
CNN Business
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Bed Bath and Beyond has named a new CEO — and investors are selling off the stock sharply.
The beleaguered retailer has tapped interim leader Sue Gove to the position permanently. She’s held the position for the past four months following the exit of its former CEO Mark Tritton, who failed to turn around the company.
Shares of the retailer fell 8% following the announcement after rallying 24% Tuesday. The stock is now down about 64% for the year, compounding to the retailer’s many problems.
As for Bed Bath and Beyond’s future under Gove, the company said it will continue to “execute is strategic plan” announced in August and prioritize “on strengthening its financial positioning, increasing customer engagement, driving traffic, and recapturing market share.”
In August, Bed Bath and Beyond laid off approximately 20% of corporate employees, announced the closure of around 150 stores and slashed several of its in-house home goods’ brands. Crucially, it secured more than $500 million in financing to shore up its ailing financial situation.
It also revealed that sales at stores open for at least a year plunged 26% during its latest quarter ending August 27. The company also lost $366 million in that period and profits fell as the chain discounted merchandise to clear shelves.
Neil Saunders, managing director of GlobalData, said the appointment of Gove is a “sensible and pragmatic solution” because of her knowledge of the Bed Bath and Beyond.
“At this point in time, consistency and a steady hand on the tiller are far more important than getting a different CEO who wants to shake things up or start putting in place new plans,” Saunders wrote in a note.
“In any case, it is our view that Bed Bath and Beyond would have difficulty in recruiting someone from the outside because of both the extreme challenges it faces and the lingering doubts about its long-term survival,” he added.
