Bed Bath & Beyond on Monday announced the appointment of recently named board member Mary Winston as interim CEO to replace Steven Temares, effective immediately. The search for his permanent replacement will be for someone with "transformation and innovation experience in the retail sector," according to a company press release. He also resigned as a member of the retailer's board.
Winston's core experience has been on the financial side, according to the release. In addition to board and audit experience, she has served as chief financial officer at Family Dollar Stores, Giant Eagle and Scholastic Corporation, as vice president and controller of Visteon Corp. and vice president, global financial operations at Pfizer Inc.'s pharmaceuticals group.
Another recently appointed board member, Andrea Weiss, was named chair of the board's Business Transformation and Strategy Review Committee, to ensure progress in the company's turnaround, the company also said.
Temares's departure follows weeks of agitation between the struggling home goods retailer and a group of activist investors that includes Legion Partners Holdings, Macellum Advisors GP and Ancora Advisors.
Most recently, that group criticized last month's board shakeup, which included bringing on Winston and Weiss, as falling "significantly short of needed change," according to a May 2 note emailed to Retail Dive. The group didn't immediately respond to Retail Dive's request for comment on Temares' resignation.
Temares taking responsibility and stepping down was the right thing to do, but that, and having a new team, hardly signal the end of the retailer's woes, according to GlobalData Retail Managing Director Neil Saunders. "Under Mr Temares, Bed Bath & Beyond has lost market share as it has fallen behind peers and failed to keep pace with a changing homewares market. The lack of action, forward thinking and urgency from the board have been the main reasons for this decline," he said in comments emailed to Retail Dive, warning, "There will be many more painful quarters ahead as the company adapts and adjusts its model to one which can produce better growth."
Telsey Advisory Group analysts led by Cristina Fernández agreed, but also warned that "the current succession plan does seem to have been hastily devised in recent weeks in response to building pressure from activist investors and follows the appointment of five new board members effective May 1, including the now appointed interim CEO. In the near-term, we expect Bed Bath & Beyond's business to remains under pressure."
Bed Bath & Beyond once attracted shoppers through a wide home goods assortment and its ubiquitous blue coupons. But its merchandise has increasingly become a commodity found anywhere and its coupons have steadily undermined margins. Mass merchants like Target and Amazon, meanwhile, are ahead in differentiating through their own labels, although Bed Bath & Beyond has also recently embarked on private label furniture lines. The retailer is also behind in e-commerce and omnichannel, though digital sales helped boost store comps in its most recent quarter, and it's burdened with too many stores. Its fourth quarter net sales fell about 11% to $3.3 billion and comps declined some 1.4% as the home goods retailer swung to a loss of $253.8 million from a profit of $194 million in the year-ago quarter.
"Bed Bath & Beyond now needs to search for a leader who can put in place a plan to refashion the company to the modern realities of retailing. Preferably, this should be someone with experience of rebuilding failed retail businesses," Saunders said, adding the retailer faces a pressuring, if disruptive, need to close stores, invest in remaining stores and online, and streamline operations. "The hope is that a new leader will grasp the nettle in the way that Steven Temares was not able or willing to do."