(Bloomberg Opinion) -- In the face of pressure from an activist investor coalition, Bed Bath & Beyond announced a bit of spring cleaning on Monday.
The retailer said five of its board members would depart, including the chain’s co-founders, Warren Eisenberg and Leonard Feinstein. Five new directors have been appointed to replace them, and board member Patrick Gaston has been named independent chairman. A special committee has been formed to focus on business strategy and transformation — an area that should be its most urgent priority.
These changes are a step in the right direction for Bed Bath & Beyond, whose profitability and comparable sales have been dented in recent years as it struggles to bring shoppers into its stores.
And it is some measure of victory for the activists — a group made up of Legion Partners, Macellum Advisors and Ancora Advisors — who had been pushing to toss the entire board and the CEO as well as urging a rethinking of everything from the chain’s merchandising to its pricing strategy. The activists had criticized the company for not having enough board members with retail experience, and these latest changes help with that. Appointee Harsha Ramalingam has been a leader at Amazon.com Inc., for example, and Mary Winston is a one-time CFO of Family Dollar.
Unfortunately, though, this slate of changes hardly instills confidence that Bed Bath & Beyond has turned the page on a dark chapter.
For one, these moves still leave Steven Temares as CEO. He has been in that job since 2003 and thus bears more responsibility than anyone for its current troubles. A refreshed board will not matter much as long as Temares continues to run the company’s day-to-day operations.
And forming a board committee on business transformation and strategy is, in theory, a solid idea. But it only makes a difference if it actually comes up with fresh ideas and can put new urgency behind executing them.
The window has not closed entirely for Bed Bath & Beyond to return to relevance. It could sell some of its smaller chains and speed up its rollout of more profitable private-label goods. It could do more with the Decorist.com business it acquired to gain a stronger footing in the services business. And, most important, it could accelerate its exploration and rollout of new store formats so that its stores could become more inviting thanks to changes such as better sight lines or more space devoted to large furniture.
The board appointments will matter to Bed Bath & Beyond only if they are the beginning of significant changes. If they turn out to be little more than an olive branch to the activist investor group, they won’t make much of a difference at all.
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Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.
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