Bed Bath Soars 47% on Report Chewy Co-Founder Has a Big Stake

By Dhirendra Tripathi

Investing.com – Bed Bath & Beyond (NASDAQ:) stock surged 47% in premarket trade Monday on a report in The Wall Street Journal that Chewy (NYSE:) Co-Founder Ryan Cohen has built a large stake in the retailer and is pushing for changes.

According to the report, Cohen, who also serves as the Chairman of videogames retailer GameStop (NYSE:) has a 9.8% stake in Bed Bath, making him a top-five shareholder in the company. As of Friday, Bed Bath had a market cap of $1.55 billion. The stock is down over 42% in the last year against the near 13% rise in .

Cohen claims that Bed Bath’s strategy is failing to stem sustained market share losses, the WSJ report said. He wants the chain to simplify its structure and consider a sale or separation of BuyBuy Baby, its brand of stores selling a wide range of baby products including strollers, car seats, and diapers. He believes BuyBuy is worth several billion dollars. Cohen has even suggested selling the entire company, WSJ said.

Other than those options, he wants the company to narrow the focus of its turnaround plan and maintain the right inventory mix to meet demand.

The chain’s turnaround plan has centered so far around reducing the number of products in stores and launching new private labels.

Like most retailers, Bed Bath has been troubled by surging inflation and extended supply chains as factories in China and Vietnam have had temporary shutdowns due to the pandemic. That has resulted in inadequate inventories at stores at a time when the buyer is keen to shop after the pandemic.

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