The Wall Street Journal: Bed Bath & Beyond’s CEO, board targeted by activist investors

A trio of activist investors thinks Bed Bath & Beyond Inc.’s business model has gotten sleepy and plans to give the big-box retailer a wake-up call.

Three activist funds — Legion Partners Asset Management LLC, Macellum Advisors GP LLC and Ancora Advisors LLC — together control a roughly 5% stake in Bed Bath & Beyond BBBY, +1.24%   and are preparing to launch a proxy fight to replace its entire 12-person board, according to people familiar with the matter.

The group contends Bed Bath & Beyond has failed to adapt as consumers increasingly shop online or expect unique experiences in bricks-and-mortar stores, the people said. The retailer has allowed its costs to increase, they said, resulting in shrinking margins over the past several years.

The investor group wants the retailer, known for its large stores packed with bedding, towels, kitchen trinkets and other home goods, to better curate its merchandise and consider selling noncore brands such as Buy Buy Baby and Cost Plus World Market to focus on its core business, the people said. It also wants it to replace Chief Executive Steven Temares, who has led the company since 2003, they said, and better align compensation with performance.

An expanded version of this report appears on WSJ.com.

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