By Ginger Adams Otis and Ryan Felton
Bed Bath & Beyond Inc.'s Chief Financial Officer Gustavo Arnal died by suicide Friday after jumping from a New York building.
Mr. Arnal, 52 years old, died two days after he had briefed investors on the retailer's plans to secure new financing, slash jobs and close about a fifth of its namesake stores. The finance veteran had been with the company for about two years.
His death leaves Bed Bath & Beyond, which has been searching for a permanent chief executive, with a leadership gap at a time when vendors and investors have been worried about its operations. The company has been facing funding pressures and is undergoing a major overhaul of its strategy.
The leadership gap started in June when former CEO Mark Tritton left the company, after his efforts to overhaul it led to falling sales and profits. Independent director Sue Gove is interim CEO while the company looks for a permanent replacement.
Mr. Arnal lived in a 57-story Manhattan skyscraper known as the Jenga Tower for its shape of misaligned apartments stacked on top of each other.
The New York City medical examiner's office said on Sunday it determined he had died by suicide. The New York Post reported earlier on Mr. Arnal's death.
"The entire Bed Bath & Beyond Inc. organization is profoundly saddened by this shocking loss," the company said Sunday. It didn't name a successor and declined to comment further, citing the privacy of Mr. Arnal's family.
On a call Wednesday with investors, Mr. Arnal had discussed the restructuring plans and provided interim financial forecasts. He also told analysts that the company was still in the process of finalizing its accounting for the quarter that ended Aug. 27.
Mr. Arnal, a longtime consumer-products executive, joined the home-goods retailer in April 2020. He was part of a new team assembled by Mr. Tritton. They pursued a strategy to revive sales by focusing on private-label goods, a move that alienated shoppers. Mr. Arnal was one of the few top executives to stay in his role after Mr. Tritton departed. Mr. Tritton declined to comment on Sunday.
Bed Bath & Beyond executives said last week that they were revamping the strategy, bringing back national brands and closing about 150 underperforming stores. The changes come as the company heads into the crucial holiday selling season when it and other chains are facing a pullback by shoppers.
The company has been burning through cash reserves in recent quarters, ending May with just about $100 million. Its market value has fallen below $1 billion, from a peak of more than $17 billion a decade ago.
Last week, Bed Bath & Beyond said it had secured $500 million in financing, including a new $375 million loan through JP Morgan Chase & Co. from Sixth Street Partners. Mr. Arnal and other executives said the fresh cash would stabilize the business as the company enters the holiday season.
Bed Bath & Beyond's shares have been on a roller coaster this year as investors bet on its future and bid up the stock after activist investor Ryan Cohen disclosed a stake. The shares took a hit Aug. 18 when Mr. Cohen unloaded his entire stake in the company, about five months after initially acquiring his shares.
On Aug. 16 and 17, Mr. Arnal sold about 55,000 shares in company stock for roughly $1.4 million, when Bed Bath & Beyond shares briefly jumped above $20, according to securities filings. Shares of the company, which closed Friday at $8.63 each, have fallen about 66% over the past year.
Mr. Arnal's stock was automatically sold under a prearranged plan established in April 2022 with securities regulators. Such plans are typically set up by company insiders to sell shares at predetermined prices. Mr. Arnal still owned about 255,000 shares following the transactions, according to securities filings.
Bed Bath & Beyond disclosed on Wednesday that the company, Mr. Arnal and Mr. Cohen were named as defendants in a shareholder lawsuit seeking class action status, alleging the pair sought to inflate the company's share price before Mr. Cohen's completion of his stock sale.
The company responded last week that it believed the suit is without merit. The company on Sunday declined to comment on the litigation. A spokesman for Mr. Cohen said he had no comment. The plaintiff, Pengcheng Si, didn't respond to requests for comment.
Mr. Arnal had joined Bed Bath & Beyond after working as CFO of beauty products maker Avon and in senior positions overseas at Procter & Gamble Co. When he joined, Mr. Tritton said that Mr. Arnal's deep knowledge of retail and consumer goods would help accelerate its turnaround plans.
"The company needs to act quickly to stabilize the situation," Cathy Logue, head of the financial officers practice at Stanton Chase, an executive search firm, said on Sunday. "They need a chief financial officer who is credible and who can communicate effectively with investors to regain confidence."
-- Nina Trentmann and Suzanne Kapner contributed to this article.
Write to Ginger Adams Otis at Ginger.AdamsOtis@wsj.com and Ryan Felton at ryan.felton@wsj.com
$(END)$ Dow Jones Newswires
September 04, 2022 20:17 ET (00:17 GMT)
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