Topline

Brick-and-mortar retailer Bed Bath & Beyond announced Friday it has reached an agreement with activist investor Ryan Cohen to expand its board and explore a sale of its baby-focused business after the 36-year-old billionaire took a nearly 10% stake in the firm this month and blasted company management for the firm’s ailing business.

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In a Friday morning release, Bed Bath & Beyond said three directors designated by Cohen’s investment firm RC Ventures would join the firm’s board immediately and will stand for election at its annual shareholder meeting later this year; the board will temporarily expand to 14 members until 11 members are elected at the shareholder meeting.

All veteran directors with restructuring experience, the chosen members include Marjorie Bowen, former director at student-loan servicer Navient and retailer Talbots; Shelly Lombard, who’s served as director of a special-purpose acquisition company and financial services firm Innovate; and investment banker Ben Rosenzweig, a partner at Atlanta-based Privet Fund Management.

Bed Bath & Beyond said two RC Ventures appointees would also join a four-person committee to explore “alternatives to unlock greater value” from the company’s Buy Buy Baby brand, following Cohen’s note earlier this month insisting the company evaluate a full sale of the brand to a well-capitalized acquirer.

In statements on Friday, Bed Bath & Beyond chair Harriet Edelman said the firm was “highly committed to fundamentally reshaping” its business, while Cohen praised the resolution as a “positive outcome” for shareholders and the company board for “promptly embrac”[ing]” his ideas.

The agreement comes less than two weeks after Cohen sent the firm a letter in which he disclosed a 9.8% stake (becoming one of Bed Bath & Beyond’s top five shareholders), blasted management for “disappointing shareholder returns and perpetual underperformance” over the past ten years and laid out suggestions to help spur stock growth.

Shares of Bed Bath & Beyond—another highly shorted stock caught up in last year’s retail-fueled meme-stock mania—surged as much as 8% in premarket trading Friday; they’re up more than 45% since Cohen disclosed his investment, but are still down about 40% over the past five years.