Bed Bath and Beyond (NASDAQ:BBBY) stock took a hit early on Monday as the company announced that co-founders Warren Eisenberg and Leonard Feinstein will be stepping down.
The Union, New Jersey-based retail chain said it has added five new independent members to its board of directors, replacing the two aforementioned co-founders. The move comes as the business has been facing pressure from a number of activist investors who seek a new look for the company’s board.
Bed Bath & Beyond received the suggestion from activist investors Legion Partners Asset Management, Macellum Advisors GP and Ancora Advisors last month. The goal was to replace the company’s entire board, while also requesting that the business oust CEO Steven Temares.
The business said that it encouraged and invited the activist group to take part in the transformation of the board, but the investors declined. The Bed Bath & Beyond board changes will take place on May 1, which will see the board have 10 directors, nine of which are independent.
The move comes as the company has faced its fair share of struggles in trying to keep up with changing consumer tastes, as well as new shopping habits. These unfavorable trends have sent the company’s sales growth down to 1.1% last year–in 2003, it was 22%, which is when Temares took over as boss.
“The changes announced today reflect significant shareholder input and underscore our commitment to ensuring we have best-in-class governance,” said Patrick Gaston, an independent chairman.