Shares of Bed Bath & Beyond Inc. declined by almost 20% as investors assessed the challenges of the US company’s leadership after the unexpected passing of former Chief Financial Officer (CFO) Gustavo Arnal.
The stock of the home goods retailer fell 18.4% to $7.04 following the death of its finance chief. Bed Bath & Beyond has appointed Chief Accounting Officer Laura Crossen as interim CFO.
Arnal has been a part of the New Jersey-based company since 2020, after he worked as CFO for American-British cosmetics brand Avon Products Inc. in London. He also had a 20-year run with Procter & Gamble Co.
Major Challenges in Bed Bath & Beyond
Bed Bath & Beyond’s sudden loss came after it reorganized its executive team, eliminating positions, including chief operating officer, to restore investors’ optimism and regain customers.
In recent months, the cash-strapped retailer has seen its business weaken and underwent a significant change in management.
Bed Bath & Beyond significantly lost sales momentum due to the lack of enough supply for certain products, while GameStop Corp. Chairman Ryan Cohen divested his whole stake in the company.
The company, however, gained a financial lifeline in the previous week, stating that it was able to secure $500 million worth of new financing, including a loan.
Bed Bath & Beyond also looks to find and assign a permanent chief executive officer (CEO). Interim Chief Executive Sue Gove currently runs the retailer following the board’s dismissal of Mark Tritton in June.
Cristina Fernandez, a retail analyst for a New York-based consulting brokerage firm, said Bed Bath & Beyond is in a challenging financial position. According to her, the lack of a permanent CEO and another opening in senior leadership makes it more difficult to keep the company’s focus on execution.
Bed Bath & Beyond recently revealed details of its plans to strengthen the business again, which involve shutting down about 150 of its less producing namesake stores, cutting 20% across its corporate and supply chain workforce to reduce costs, and revising its merchandising strategy.
Such moves are necessary for the struggling retailer to make, as it also has seen a slowdown in its sales in the latest quarter. Bed Bath & Beyond’s same-store sales fell 26% in the second quarter, sharper than the declines in the last few quarters.
