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

Signage is displayed exterior a permanently closed Mattress Bath & Previous retail retailer in Hawthorne, California, on Could well well maybe also simply 1, 2023.

Patrick T. Fallon | AFP | Getty Images

Investment company JAT Capital despatched a scathing letter to the board of the still Mattress Bath & Previous on Friday asserting it has refused to answer to questions from shareholders and is partaking in what the funding company called unheard of “sad habits.”

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

“We have tried to interact constructively with investor kinfolk, senior management and the Board of Directors in newest months, making solutions of handiest practices that could care for and provides a take hang of to fee, and more no longer too long in the past declaring actions taken by management and the board that seem like destroying shareholder fee,” the letter, penned by JAT’s founder John Thaler, states.

“We have taken the more energetic posture with Previous because, fairly frankly, I have not considered such sad habits by a Board in my profession. The issues that I get heard, the issues which were spoken valid now to me, and the actions I get witnessed are in a category that I have not considered.”

Previous used to be beforehand identified as Overstock.com, which purchased Mattress Bath out of monetary catastrophe and rebranded. Old to its rebrand, Previous had been grappling with dreary sales and a dwindling market cap. After its first quarter as the still Mattress Bath, results were blended with steep declines in sales and profits.

The firm didn’t return a search files from for tell.

Earlier this month, JAT called on Previous to fireplace Johnson. Days later, the firm launched he used to be stepping down.

In its letter, dated Friday, JAT wondered why Johnson’s board seat used to be removed after his ouster and talked about it used to be an strive to weaken “shareholders skill to get a notify.” The company furthermore accused the board of being disingenuous about Johnson’s determination to circulate away the firm and talked about bluntly that he’d been “fired.”

“Rather than terminating Johnson and publicly asserting so (a tell that can were successfully purchased by everyone enthusiastic), the Board decided to craft a tell along with Jonathan suggesting that he had stepped down, and even making the ludicrous tell that he and the Board had jointly concluded that ‘now used to be the excellent time’ for a leadership transition,” the missive reads.

“Now is the excellent time? In the middle of a firm re‐branding effort, simply as the firm embarks on a $150 million advertising advertising campaign? And that coincidentally coincides with shareholders calling for Johnson’s removal? Writing a tell that twists the info and makes disingenuous characterizations of the topic … furthers the belief that the Board is engaged in self‐preservation and within dealing.”

Meanwhile JAT has called for Marcus Lemonis, the Camping World CEO and TV persona who starred in CNBC’s “The Profit,” to design end over management of the firm. He joined the Overstock board final month and has cheered its transition to Previous Inc.

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

“In idea to be one of many few cases the assign I were in a design to interact with a member of the Board end to why Marcus Lemonis wasn’t being licensed to again organize the industrial, [chair of the board] Allison Abraham acknowledged to me that she (and others) were vexed that ‘Marcus has a secret horrible design,'” the letter states. “She has allegedly repeated this identical topic to the length in-between CEO Dave Nielsen. When pressed on what that ‘horrible design’ will be, she acknowledges that she would no longer know.”

Lemonis urged CNBC he has no hobby in being CEO of Previous nonetheless did be a part of the board with an expectation that’d he be appointed executive chairman, which is yet to happen more than a month into his tenure with the firm. No clear timeline used to be assign nonetheless other shareholders beyond JAT were questioning what’s ahead for the firm’s board given his appointment, Lemonis talked about.

He added he’s “disappointed” kinfolk between the board and traders get reached this low-point nonetheless has the same opinion with JAT that alternate wants to happen.

“To be excellent I’m roughly strange to just a few the answers too,” he talked about of the quiz’s JAT posed.

As a long way as the “horrible design” he’s suspected of, Thaler talked about he’s been requested if he’s a “malicious program” for JAT or seeking to amass Previous, which he both denies.

“I bask in working with corporations, it has been my ticket for a extraordinarily long time,” talked about Lemonis. “If I desired to amass the industrial this would perchance no longer be the way I’d end it.”

JAT called on Previous’s board to answer to its questions, once and for all, and for everyone from distributors to promote-side analysts to position a matter to more transparency.

“It’s my sturdy want that the Board be forced to illustrate what it’s miles doing. Here just isn’t any longer an unreasonable build a matter to. The actions cited below which the Board has taken in the final 60 days seem like to the detriment of the firm and shareholders,” the letter states. “This Board has refused to illustrate why they’ve made these choices.”

Read the fleshy letter below:

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