Dive Brief:
- Bed Bath & Beyond on Wednesday named Sue Gove as its new CEO. She has held that role in the interim since June.
- Gove’s appointment was unanimously approved by the retailer’s board of directors. She will maintain her role on the board, according to a company press release.
- Under Gove, Bed Bath & Beyond will continue to execute on the turnaround plan it announced in late August, which includes closing stores, laying off staff and discontinuing three of its recently launched private labels.
Dive Insight:
After four months of serving in the interim, Gove’s role as CEO has become permanent.
She stepped into the position in late June following the departure of Mark Tritton. Tritton, who arrived at Bed Bath & Beyond from Target in November 2019, undertook his own transformation, including overhauling the C-suite, introducing at least 10 private labels and remodeling stores.
During his tenure, the retailer also announced a $1 billion plan to repurchase shares, and last November Bed Bath & Beyond touted its progress on share buybacks, saying it had already bought back $600 million and planned to repurchase the remaining $400 million by the end of the fiscal year. James Gellert, CEO of RapidRatings, earlier this year deemed the move “a very self-indulgent activity for a company that is operationally challenged.”
Now in a financially weaker position, Gove is tasked with executing on another turnaround effort, this time including laying off about 20% of its corporate and supply chain staff, closing more than 150 stores and walking back on its private label efforts. The retailer in August said it would discontinue three of the nine brands it recently launched — Haven, Wild Sage and Studio 3B. The remaining brands will have inventory reduced by 20 percentage points, while the retailer will boost national brand inventory penetration by 20 percentage points.
But Bed Bath & Beyond is continuing to face declining share and sales. After receiving a brief boost in the early months of the pandemic, the retailer has suffered from weakening demand in the home category recently. In the second quarter, the company reported net sales fell 28% year over year to $1.4 billion, while comparable sales declined 26%. Operating loss quadrupled to $346.2 million and net loss expanded fivefold to $366.2 million.
Gove’s appointment, however, may provide a sense of stability in the retailer’s C-suite. Bed Bath & Beyond’s chief merchandising officer, chief operating officer and chief stores officer roles have faced changes in recent months. And in September Laura Crossen took on the chief financial officer position in the interim following the suicide of former CFO Gustavo Arnal.
Gove came to the retailer in June with more than 30 years of experience in the retail industry, including as CEO of Goldsmith International and chief operating officer of Zale Corporation.
“The appointment of Sue Gove as the permanent CEO of Bed Bath & Beyond is a sensible and pragmatic solution to the problem of who will lead the chain through its difficult transition,” according to GlobalData Managing Director Neil Saunders, adding that her management team faces challenges heading into the holiday season as demand for home goods remains soft. “This will be the next acid test for Ms. Gove and her team, with some good – or at least not quite so bad – results needed to restore investor confidence and provide some operational stability.”
