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Bed Bath & Beyond (NASDAQ:BBBY) Appoints Interim CFO to Fill the Leadership Gap
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Bed Bath & Beyond (NASDAQ:BBBY) Appoints Interim CFO to Fill the Leadership Gap

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Bed Bath & Beyond has appointed an interim CFO to head the retailer’s finances until a suitable candidate is found. BBBY is facing a massive challenge to turn around its operations amid rising macro and micro issues.

 

Update (September 7): Bed Bath & Beyond (BBBY) has appointed Laura Crossen as the interim CFO, effective September 5. The step was taken to fill the leadership gap after the sudden demise of ex-CFO Gustavo Arnal on September 2.

Notably, Crossen was recently promoted to the post of Senior VP of Finance and Chief Accounting Officer, after the post was left vacant by John Barresi’s departure in June. As per a regulatory filing, “Ms. Crossen will be the Company’s principal financial officer on an interim basis and will continue as the Company’s principal accounting officer.”

Furthermore, BBBY’s compensation committee revised Crossen’s base salary upwards to $200,000. The committee also raised her target annual bonus opportunity to 70% of her base salary and provided payments for severance and benefits, subject to certain conditions.  

BBBY Left with a Leadership Gap After CFO’s Demise

BBBY received another blow from the death of its CFO Gustavo Arnal on September 2. Arnal was also the Executive Vice President at BBBY. The American domestic merchandise retailer is already struggling to find a replacement after ex-CEO Mark Tritton left in June.

This news put a lot of pressure on BBBY’s board, which is already facing liquidity issues and is undertaking steps to turn around the failing retailer. Arnal is said to have jumped from his New York’s Jenga Tower home on September 2. The police have confirmed his death was a suicide.

The company released a statement mourning Arnal’s death. Harriet Edelman, Independent Chair of BBBY’s Board of Directors said, “Gustavo will be remembered by all he worked with for his leadership, talent, and stewardship of our Company… Our focus is on supporting his family and his team and our thoughts are with them during this sad and difficult time. Please join us in respecting the family’s privacy.”

BBBY’s Troubles and Stock Price Swings

Bed Bath & Beyond has been seeing its sales diminish post-pandemic. The company has even been facing activist investor pressure to undertake strategic alternatives. Amid this, investor Ryan Cohen’s purchase and sale of his majority stake in BBBY swayed the stock wildly.

Interestingly, Arnal too offloaded BBBY shares worth $1.40 million during the same two-day period on August 16 and 17 when Cohen sold his stake. This has raised questions about his involvement with Cohen in the “pump and dump” schemes often used by speculators to profit from penny stocks. Arnal still had about 255,000 shares of BBBY after his last sale.

Furthermore, a shareholder class action lawsuit has been filed against the company, Arnal, and Cohen for manipulating the stock prices before the sale of Cohen’s stock. As per some reports, the lawsuit, filed on August 23, is pegged at $1.2 billion.

As for the stock price, BBBY’s stock has lost 43.1% so far this year. The stock, on the other hand, has gained a massive 83.3% since July, thanks to Cohen’s stake disclosure and the meme stock frenzy. 

Is Bed Bath & Beyond a Good Stock to Buy Today?

Now may not be an ideal time to buy BBBY stock. Even Wall Street analysts have a Strong Sell rating on BBBY stock currently. This is based on two Holds and 13 Sells. The average Bed Bath & Beyond price target of $4.18 implies a whopping 40.6% downside potential to current levels.

Ending Thoughts

Bed Bath & Beyond has appointed an interim CFO to lead the finances till a suitable candidate is found. Meanwhile, Sue Gove is acting as interim CEO till that post is filled. The board must find suitable replacements for both CEO and CFO who will be able to successfully navigate the sinking ship.

Analysts are also highly skeptical of BBBY’s recovery in the near term amid its rapid cash burn. Plus, its latest round of additional financing has raised concerns. Moreover, the company announced a 20% layoff in staff and the closure of around 150 stores to save money, which has also jolted investors. All in all, it’s a bad time for the home goods retailer, and there’s a lot of uncertainty surrounding its future.

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