Bed Bath & Beyond (Union, NJ) has fired CEO Mark Tritton after its first quarter sales plunged by 25%, forcing the retailer to make aggressive cost-cutting moves as it contends with economic headwinds on top of soft demand.
For the three months ended May 28, Bed Bath & Beyond lost $358 million. The company said it would employ different tactics to plug its balance sheet, including the halting of its new store and remodeling efforts for the remainder of the year.
Bed Bath & Beyond is also taking aim at costs related to inventory build-up, saying it will “accelerate markdowns in order to right-size inventory levels commensurate with the declining sales trends.”
Sue Gove, a director on the company’s board, has been named the interim CEO. Additionally, Bed Bath & Beyond ousted Chief Merchandising Officer Joe Hartsig and named Mara Sirhal as his replacement.
In a prepared statement, Gove said:
“I step into this role keenly aware of the macro-economic environment. In the quarter there was an acute shift in customer sentiment and, since then, pressures have materially escalated. This includes steep inflation and fluctuations in purchasing patterns, leading to significant dislocation in our sales and inventory that we will be working to actively resolve.
“The simple reality though is that our first quarter’s results are not up to our expectations, nor are they reflective of the company’s true potential. The initiatives we are instituting today are just the first steps in putting our business on firm footing to drive our future success.”
Anthony Chukumba, an analyst at investment bank Loop Capital, is less optimistic about the retailer’s future prospects.
“We are looking at a situation in which this company is probably not going to be around,” Chukumba told Yahoo Finance. “It’s not going to take years. We could be talking about months at this point. We are in the end days. These results were a dumpster fire, there is no other way to put it.”
Also in Bed Bath & Beyond’s 2Q results announcement, the company said it would continue “evaluating options” for its buybuy Baby brand. At the end of April, The Wall Street Journal reported that potential buyers had emerged for the brand.