Until Bed Bath & Beyond filed for Chapter 11 bankruptcy protection on April 23, its future was largely in the hands of veteran retail executive Sue Gove.
She was brought in to turn around a proud chain that had fallen on hard times, a victim of operational mistakes and changing shopping habits that were accelerated by the pandemic. Gove was no stranger to big lifts; she previously helped revive chains such as Golfsmith in the wake of the Great Recession.
That her recovery efforts ultimately proved too little too late offers a glimpse into the heavy seas corporate restructuring pros must wade into when trying to rescue floundering enterprises.
Retail analysts credit Gove and her team with bringing urgency to the task. When she took the CEO reins in October, Bed Bath & Beyond touted what she had accomplished as interim chief executive, including securing new financing and prioritizing the sale of national branded goods over the retailer’s less popular in-house items.
Much of her energy was spent desperately seeking financing as the company burned through cash. She presided over a process to close fulfillment centers and hundreds of under-performing outlets, only to reach a point where Union, New Jersey-based company Bed Bath & Beyond now teeters on the brink of shuttering all its namesake and Buy Buy Baby stores in a liquidation unless it finds a last-minute buyer for its assets.
In an interview with the social stock trading platform eToro, Gove stuck to her script a little more than a week before the company filed for bankruptcy.
“Our company is no stranger to challenges,” she said. “We have certainly faced that in this last year more so than in any time in our company’s history. And we’ve had to make some tough decisions for sure. And we also know that … where we’re operating today and the value we’re at today is not representative of our potential. But rest assured that we are working relentlessly to achieve our goals, to use every available step that we have available to us to both sustain and grow our business.”
Neither Gove nor Bed Bath & Beyond responded to a request to comment for this story.
Before joining Bed Bath & Beyond, Gove spent more than 30 years in the retail industry. She currently serves as an independent director on several company boards.
Gove began her career with Zale Corp., America’s largest specialty jewelry retailer, according to her LinkedIn profile. During her 25-year tenure at Zale, she brought her operations, strategic planning, financial and management skills to bear as executive vice president and chief operating officer at that national chain.
Gove also worked as an independent consultant for Alvarez & Marsal, where she primarily focused on advisory and turnaround for retail companies. She joined Golfsmith International, the world’s largest specialty-golf retailer, in 2008 as chief operating officer and in 2012 became its president and CEO.
During her tenure at Golfsmith, Gove’s efforts lead to an increase in market share in the U.S. and Canada. She “was instrumental in increasing the firm’s revenue in a declining market, tripled the profit of the web channel, enhanced operations and improved profitability,” according to her bio on her LinkedIn page. Under her leadership, Golfsmith bought Golf Town, Canada’s largest golf retailer, in 2012. She oversaw the integration of the two companies.
In 2019 Bed Bath & Beyond was targeted by dissident investors Legion Partners, Macellum Advisors and Ancora Advisors. They criticized the retailer’s performance and called for then-CEO Steven Temares to be fired. The activists also put up their own slate of board nominees that included Gove.
Gove was installed on Bed Bath & Beyond’s expanded board in May 2019 as part of the retailer’s settlement with the dissidents, and Temares also stepped down. In November that year, Bed Bath & Beyond recruited Mark Tritton, a Target merchandising executive, as its president and CEO.
In large part, Gove’s challenge was to reverse the damage done by Tritton’s strategy that entailed developing private-label product to replace some of Bed Bath & Beyond’s merchandise from national brands. Shoppers were disappointed, and the retailer’s sales suffered. The pandemic also created serious supply-chain woes for Bed Bath & Beyond, leaving it bereft of inventory.
With its sales plummeting, Bed Bath & Beyond took action last summer, letting Tritton go and replacing him with Gove as interim CEO. She immediately put a comeback plan in place, starting with discontinuing some of the retailer’s private-label offerings. She shuffled upper management and tried to repair relations with Bed Bath Beyond’s vendors, who were worried about getting paid and canceled orders. Bed Bath & Beyond and Gove held a summit for their suppliers last fall to mend fences.
But the company’s cash crunch didn’t help with its rocky ties to vendors that had tightened their credit terms and left Bed Bath & Beyond without ample inventory. That resulted in the company having a dismal holiday season and later defaulting on some debt. Gove took several stabs at securing enough financing to avoid a Chapter 11 filing, with headlines describing those efforts as “Hail Mary passes.”
Bed Bath & Beyond struck a deal to raise $1 billion through Hudson Bay Capital Management, but later terminated the agreement after it raised $360 million, which immediately had to go to repay outstanding revolving loans and to cover operational losses rather than to restore inventory levels. The company then planned to raise $300 million in a stock offering and crafted a $120 million consignment deal to obtain inventory.
Ultimately, the effort failed. But Bed Bath & Beyond is nothing if not tenacious, with Chief Financial Officer Holly Etlin in a court filing saying not to count the company out yet.