Struggling Bed Bath & Beyond Names Target Executive As New CEO
(CBS/CNN) -- Bed Bath & Beyond is in serious trouble. It's betting Target's chief merchant can turn it around ahead of the critical holiday shopping season.
The retailer ended its four-month search for a new CEO and named Mark Tritton, Target's chief merchandising officer, to the role on Wednesday. Tritton worked in Target's C-suite for three years, helping build its popular stable of private-label clothing and home furnishings' brands. He has also been an executive at Nordstrom, Nike and Timberland.
Bed Bath & Beyond's decision to seek out a new leader from a top competitor won Wall Street's support. Bed Bath & Beyond's stock was 22% higher — its best day since March.
The company said it will benefit from Tritton's "vision, leadership, and creativity" and said he was an "integral contributor to Target's impressive transformation."
Related: Bed Bath & Beyond Closing More Stores Than Planned
Tritton comes from Target, which is having a blockbuster year. The stock, which keeps hitting record highs, is up 67% for the year. Sales at stores open at least a year increased 3.4% during the summer quarter and profit rose in its most recent earnings report. It also raised its profit forecast for the rest of the year.
Bed Bath & Beyond desperately needs new vision. It has struggled in recent years to compete with traditional retailers such as Walmart and Target, as well as online retailers like Amazon and Wayfair.
In March, the company received a wake up call from three activist funds that built a roughly 5% stake in it and called for the company to replace its entire board of directors and CEO. Bed Bath & Beyond complied in May when former CEO Steven Temares left the company and overhauled its board of directors.
Interim CEO Mary Winston will continue to serve on the company's board of directors.
During its earnings call last week, Bed Bath & Beyond said it's closing more stores in 2019 than anticipated. Sales at stores opened for more than a year sunk 6.7% for the second quarter.
There are still 25 Bed, Bath & Beyond locations in Massachusetts and nine in New Hampshire.
Neil Saunders from GlobalData Retail complimented the appointment and told CNN Business it's "just what the company needs."
"Creating change at of Bed Bath & Beyond will not be easy," he said. "The problems are deep rooted and, among consumers, views about the chain are entrenched."
Credit Suisse analysts were equally dour on Bed Bath & Beyond. The firm said the problems facing the company, like declining sales and store traffic, are difficult for a successful turnaround. "The road ahead seems like an uphill one, and getting steeper each quarter," analysts said.
(© Copyright 2019 CBS Broadcasting Inc. All Rights Reserved. CNN's Jordan Valinsky contributed to this report.)