(Reuters) -Bed Bath & Beyond Inc on Wednesday replaced Chief Executive Officer Mark Tritton as part of a management shake-up to reverse a slump in its business, the home goods retailer said.
Shares fell 13% in premarket trading as the company's first-quarter net sales slumped 25%, rounding off a year of sales slipping below market expectations.
The rejig at the top management comes just a few months after activist investor and billionaire Ryan Cohen criticized the retailer for an "overly ambitious" strategy, overpaying top executives and failing to reverse market share losses.
Cohen, who is also the chairman of GameStop Corp (NYSE:GME), had disapproved of Tritton's $27 million compensation over the last two years, saying it was far more than what top bosses earned at bigger retailers including Macy's (NYSE:M), Kohl's, and Dollar Tree (NASDAQ:DLTR).
"Mr. Tritton should recognize that chief executives who are awarded outsized compensation and seek frequent publicity also invite much higher expectations when it comes to growth and shareholder value creation," Cohen said in March.
The company subsequently reached an agreement with Cohen by appointing three new directors, two of them to the committee exploring options for its baby products unit.
On Wednesday, it named the head of the strategy committee and independent director Sue Gove as Tritton's replacement on an interim basis.
Tritton was made CEO in 2019 soon after the retailer settled with another set of activist investors who had criticized it for failing to adapt quickly to a shift in consumer preference to shop online.
Bed Bath & Beyond (NASDAQ:BBBY) also replaced its chief merchandising officer Joe Hartsig with Mara Sirhal, general manager of its Harmon health and beauty stores, as it looks to overcome supply chain issues that have plagued it for most of the pandemic.