The death of Bed Bath & Beyond Inc
The chief financial officer comes as the retailer has lost several members of its finance team and senior executives who could temporarily fill the role over the holiday season.
The unprofitable company is expected to move quickly to reassure investors by appointing an interim chief financial officer, possibly before the U.S. stock market reopens after the Labor Day holiday weekend, recruiters and analysts said. Bed Bath & Beyond declined to comment.
Gustavo Arnal died Friday by suicide just days after he briefed investors on the company’s restructuring efforts and closed a financing deal that gave the company about $500 million in cash. As part of the restructuring, the company said last week that two more senior executives – its chief operating officer and director of stores – are leaving.
Those departures follow a management shakeup that began June 29 when CEO Mark Tritton and Chief Merchandising Officer Joe Hartsig left the home goods retailer after it reported declining sales and heavy losses. The next day the company said its chief accountant, John Barresi, who reported to Mr Arnal, had resigned.
Mr Arnal was one of the few senior executives to remain in his role during a period of turmoil for the company, and several members of his finance team have either left or been recently promoted to their roles. This new team now faces the task of completing the accounting for the company’s results and working to reassure vendors and lenders about its operations.
Pressured by shrinking sales, Bed Bath & Beyond ran low on cash reserves. Last week, Bed Bath & Beyond said some vendors were pushing for better payment terms amid concerns about its liquidity. Mr Arnal told investors that the company had started closing underperforming sites and was in regular talks with suppliers to reassure them.
“As we’ve gotten through our cash flow, we’ve seen changes to some of our suppliers and we’re managing it one week to another, so it hasn’t been a systemic ongoing change,” Mr. Arnal told investors on Wednesday. “We handle situations one by one.”
The 52-year-old finance veteran also said the company was still in the process of finalizing its accounts for the quarter ended Aug. 27. The company will have to file its quarterly 10-Q with regulators within 45 days or request an extension. Preliminary results showed sales fell 26% and the company burned through $325 million in cash during the period.
“With finances being one of the company’s most pressing challenges right now, this further erodes confidence,” said Neil Saunders, chief executive of research firm GlobalData PLC. “Bed Bath & Beyond no longer has two of its most important leadership positions: a permanent CEO and a CFO. He needs to fix it quickly.”
The company is led by board member and interim CEO Sue Gove, who previously spent 30 years in the retail industry, where she held various roles, including CEO of Zale Corp., which is now part of Signet Jewelers Ltd.
He then went into consulting, serving as a senior consultant for Alvarez & Marsal before founding Excelsior Advisors LLC in 2014.
On Wednesday, Ms Gove promoted two executives to lead the Bed Bath & Beyond and Baby shopping chains to newly created roles of brand presidents. These executives are responsible for merchandising and stores.
In the finance department, Mr Barresi was replaced at the end of June as chief accountant by another member of Mr Arnal’s team, Laura Crossen. He joined the company in 2001 and served as senior vice president of Finance and Taxation. The company has promoted its head of investor relations, Susie Kim, to head the finance ministry.
The company is likely to promote a staff member to fill Mr. Arnal’s role quickly to reassure investors at a sensitive time, recruiters and analysts said. The company’s chief executive would also typically be a candidate to lead finance on an interim basis, the recruiters said. But Bed Bath & Beyond last week said the role, which was held by John Hartmann, is being eliminated along with other changes.
Other contenders for the role of interim CFO could be Anu Gupta, the company’s chief development officer, or Mark Cassebaum, senior vice president of finance and operations. Ms. Gupta and Mr. Cassebaum did not respond to requests for comment. The company could also turn to a board member, such as its audit chairman, recruiters said.
The search for a permanent successor to Mr. Arnal is likely to take three months or more and will be complicated by challenges facing the company, including the poor performance of its business, the sudden death of its CFO and the search for a permanent CEO, recruiters. he said.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com and Nina Trentmann at Nina.Trentmann@wsj.com
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