The stock market experienced a sharp decline of 15% when it opened, and trading in shares of BB&B resumed two days later on Tuesday, September 2nd, after the Labor Day holiday. The company confirmed that Gustavo Arnal, its chief financial officer, tragically took his own life by jumping from his apartment in a high-rise building in New York City. This is the latest tragic suicide of a high-ranking officer, following a recent crisis experienced by the American retail chain, Bed Bath & Beyond (BB&B), which continues to face bad news and struggles to recover.
BB&B’s financial woes have been worsened by its own missteps in execution and misguided strategy. The company, which was trying to stabilize shaken sales caused by changes in American consumer habits and inflation, is now left without a key executive following Arnal’s death.
Prior to the announcement of BB&B’s share price sharp fall, caused by the announcement that Arnal sold some of his own shares, he led a class action shareholder lawsuit accusing Arnal, the defendant, of insider trading and causing a sharp fall in the share price of BB&B. Additionally, Arnal was involved in successful restructuring of the company where he was hired from Avon in 2020, leading negotiations to refinance the company’s debt and developing a downsizing plan that resulted in the closure of 150 stores.
BB&B experiences a change in senior management as two senior executives, Arnal and Sue Gove, leave their positions due to the unfortunate event of death. In June, Mark Tritton, an independent director, is appointed as the interim CEO, while the board of directors terminates the services of CEO Arnal. During this transitional period, the company heavily depends on Gove, who is currently a part-time employee, to lead the company while actively searching for a permanent CEO.
As later confirmed by the New York coroner, the police initially suspected that it was a suicide. Despite being present in the apartment at the time, his wife did not disclose any information to Arnal, and no suicide note was found. The building, commonly referred to as the Jenga Tower, bears a resemblance to the block-stacking game with its floors placed in an irregular manner. On September 2, the 52-year-old executive, who was originally from Venezuela, tragically fell from the 18th floor of his luxurious apartment building in Manhattan’s Tribeca area, resulting in his death.
Temporary Chief Financial Officer
After reporting to Arnal for two months, Laura Crossen resigned from her position and took over the accounting duties of the deceased CFO temporarily, as the Chief Accounting Officer of the company.
In the last quarter, the company reported a 26% drop in sales as the death spiral continues. BB&B became a meme stock with trading volume bouncing up and down due to hype on online forums and social media. The price of its shares has been experiencing violent swings caused by news of debt refinancing negotiations and changes in its shareholder structure. Beyond & Bath Bed has been teetering on the edge of receivership due to financial setbacks caused by changes in consumer habits and inflation-related effects of the pandemic.
In September 2, the market capitalization of the company stood at $690 million. Over the last decade, it was worth more than $15 billion. However, in the last 12 months, it has lost two-thirds of its value. In 2019, investors took control of the company, blaming the founders for ignoring the shift to e-commerce and failing to modernize the stores.