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Investor JAT Capital sends scathing letter to novel Mattress Bath & Beyond board over CEO ouster, vacancy

Signage is displayed originate air a permanently closed Mattress Bath & Beyond retail store in Hawthorne, California, on Might well perhaps also 1, 2023.

Patrick T. Fallon | AFP | Getty Pictures

Investment company JAT Capital despatched a scathing letter to the board of the novel Mattress Bath & Beyond on Friday pronouncing it has refused to reply questions from shareholders and is intriguing in what the funding company called unheard of “unfortunate habits.”

The company, which has a 9.6% stake within the company and claims it is no longer an activist fund, excoriated the board for a series of misdeeds, including canceling planned investor conferences and twisting the facts about ancient CEO Jonathan Johnson’s ouster.

“We comprise tried to have interaction constructively with investor family members, senior management and the Board of Directors in fresh months, making suggestions of very most life like practices that might perhaps also merely protect and toughen price, and extra currently pointing out actions taken by management and the board that seem like destroying shareholder price,” the letter, penned by JAT’s founder John Thaler, states.

“We comprise taken the extra active posture with Beyond because, reasonably frankly, I have not considered such unfortunate habits by a Board in my profession. The issues that I comprise heard, the issues that comprise been spoken on to me, and the actions I comprise witnessed are in a class that I have not considered.”

Beyond became as soon as previously identified as, which supplied Mattress Bath out of financial anguish and rebranded. Before its rebrand, Beyond had been grappling with behind gross sales and a dwindling market cap. After its first quarter as the novel Mattress Bath, results comprise been mixed with steep declines in gross sales and profits.

The corporate did no longer return a set a question to for observation.

Earlier this month, JAT called on Beyond to fireplace Johnson. Days later, the company announced he became as soon as stepping down.

In its letter, dated Friday, JAT puzzled why Johnson’s board seat became as soon as eradicated after his ouster and acknowledged it became as soon as an strive to weaken “shareholders capacity to comprise a instruct.” The company also accused the board of being disingenuous about Johnson’s chance to leave the company and acknowledged bluntly that he’d been “fired.”

“As an different of terminating Johnson and publicly pronouncing so (a assertion that would comprise been successfully got by every person fervent), the Board determined to craft a assertion along with Jonathan suggesting that he had stepped down, and even making the ludicrous assertion that he and the Board had collectively concluded that ‘now became as soon as the correct time’ for a leadership transition,” the missive reads.

“Now’s the correct time? All the draw by draw of a company re‐branding effort, correct as the company embarks on a $150 million advertising advertising campaign? And that coincidentally coincides with shareholders calling for Johnson’s elimination? Writing a assertion that twists the facts and makes disingenuous characterizations of the topic … furthers the perception that the Board is engaged in self‐preservation and inside dealing.”

Meanwhile JAT has called for Marcus Lemonis, the Tenting World CEO and TV personality who starred in CNBC’s “The Income,” to take over management of the company. He joined the Overstock board last month and has cheered its transition to Beyond Inc.

JAT renewed these calls in Friday’s letter and accused the board of being “suspicious” of Lemonis, pushing him to the sidelines and refusing his ride.

“In one amongst the few cases the do I comprise been able to have interaction with a member of the Board on the topic of why Marcus Lemonis wasn’t being accredited to aid arrange the industry, [chair of the board] Allison Abraham acknowledged to me that she (and others) comprise been jumpy that ‘Marcus has a secret unsuitable discipline,'” the letter states. “She has allegedly repeated this identical venture to the intervening time CEO Dave Nielsen. When pressed on what that ‘unsuitable discipline’ might perhaps be, she acknowledges that she doesn’t know.”

Lemonis suggested CNBC he has no curiosity in being CEO of Beyond but did join the board with an expectation that’d he be appointed executive chairman, which is but to happen greater than a month into his tenure with the company. No determined timeline became as soon as station but assorted shareholders past JAT comprise been questioning what’s forward for the company’s board given his appointment, Lemonis acknowledged.

He added he’s “disappointed” family members between the board and merchants comprise reached this low-point but is of the same opinion with JAT that switch needs to happen.

“To be like minded I am form of bizarre to a few of the necessary answers too,” he acknowledged of the demand’s JAT posed.

As far as the “unsuitable discipline” he’s suspected of, Thaler acknowledged he’s been asked if he’s a “malicious program” for JAT or taking a look to aquire Beyond, which he both denies.

“I ride working with agencies, it has been my ticket for a extremely long time,” acknowledged Lemonis. “If I needed to aquire the industry this will doubtless no longer be the device I might perhaps conclude it.”

JAT called on Beyond’s board to reply its questions, as soon as and for all, and for everyone from vendors to sell-facet analysts to seek info from extra transparency.

“It is miles my sturdy desire that the Board be forced to novel what it is doing. Right here’s no longer an unreasonable interrogate. The actions cited below which the Board has taken within the last 60 days seem like to the detriment of the company and shareholders,” the letter states. “This Board has refused to novel why they comprise made these choices.”

Read the beefy letter below:

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