Bed Bath & Beyond Inc. (NASDAQ: BBBY) Chief Executive Officer Mark Tritton has dismissed six members of the retailer's c-suite in a bold move to restructure and reinvigorate the ailing company. Tritton's move comes amid a mix of optimism and skepticism regarding the company's future under his leadership.
Mark Tritton, who was appointed as Bed Bath & Beyond's CEO on November 4, has cleaned house by dismissing the heads of the company's merchandising, marketing, digital, and legal divisions, as well as dismissing the Chief Brand Officer and Chief Administrative Officer. The only executives currently remaining are the company's Chief Financial Officer, Robyn D'Elia, and Tritton himself. Analysts with UBS Group (NYSE: UBS) have speculated that it could take months to fill the roles, though the company has appointed interim leadership for the time being.
Tritton issued a statement regarding the dismissals, "This is the first in a number of important steps we're taking," he said, "Balancing our existing expertise with fresh perspectives from new, innovative leaders of change, will help us to better anticipate and support our customers in their life journeys and shopping needs."
For the most part, Tritton's move is being seen as beneficial for the retailer. The dismissals alone, which occurred on Tuesday, triggered a bump in the company's stock. By the end of trading on Wednesday, BB&B stock was up by 5%. Firms such as Merrill Lynch and Loop Capital have expressed modest optimism for the retailer after the move. In some cases, a radical move might cause anxiety among investors; however, the dismissed executives had presided over years of decline and executed poor decisions that may have cost the company dearly. Fresh leadership is obviously what many feel BB&B needs.
Even if Tritton hadn't cut loose what many have seen as dead weight, his track record as an executive more than speaks for itself. Tritton was previously an executive with Target Corp. (NYSE: TGT), wherein two years, he launched 30 private label brands that brought monumental gains to the company. It's generally hoped that Tritton can bring this same level of success to BB&B, which has been crumbling under competition from fellow retailers and online giants such as Amazon (NASDAQ: AMZN). Investors have faith that Tritton can bring about a turnaround, as shares of BB&B have risen nearly 70% since the October announcement of his hiring.
Some maintain skeptical views, however. UBS Group noted that while the dismissal was decisive and could be beneficial, there remains issues with company leadership further down the line. UBS noted that no changes were made to positions regarding logistics, IT, and store operations, which are pivotal positions that might benefit from a similar change in leadership. Some analysts recognize Tritton's potential but are waiting to see how he fares throughout the next quarter. Other analysts believe that while the company may well experience a resurgence under Tritton, their growth in the first half of 2020 may fall short of expectations.
Tritton brings a great deal of potential to the table, but it is reasonable to expect that the company will experience growing pains as cost-saving measures and restructuring take place. With stocks continuing an upward trend and analysts mostly unanimous that Bed Bath & Beyond is heading for a resurgence, it is highly likely that the company may well push through these growing pains and experience a substantial reversal of fortunes in the near future.