Bed Bath & Beyond announced it will be replacing CEO Mark Tritton in a C-suite shakeup. Burt Flickinger, the managing director at Strategic Resource Group, joined Cheddar to discuss what that means for the retail chain. "It's an attractive takeover target … at a dollar or $2 a share," he said, noting that a new CEO has to move quickly to sell off and monetize underperforming assets for a turnaround to occur.

Closing Bell

Fallout From Bed Bath & Beyond Dropping CEO Mark Tritton

Welcome back to closing bell on cheddar news. Everyone while the retail industry still in flux and still under pressure. Bed bath and beyond in particular reporting dismal first quarter results this morning, replacing the Ceo Mark Triton in a C suite shakeup. And it does come after reports that the chain is implementing some interesting cost cutting measures, cutting hours. That's pretty typical. But even turning off A C in some of its stores turns out it's not the only big box retailers struggling many are dealing with continued headwinds, like high transportation costs, certainly fuel costs and excess inventory that they're even thinking of changing return policies, letting you keep items that you intend to return. So joining me now is Burt Flickinger, managing director of Strategic Resource Group, that's a retail consultancy firm birth. Thanks so much for coming on the show. Let's break down this retail sector together and kick things off with bed bath. Are you surprised about the earnings missed and the pressure that this company remains under, Kristen? Not surprised because we're going through to your key point going in massive accelerating retail ice age and bed bath and beyond. Is one of dozens of retailers that are in danger of going beyond the date amount today to viability next quarter next year, it's etcetera. And it's a company that's just had too many challenges transitioning from family management to professional management. So the stocks in a free fall issue and your team have reported very well. So here's a question. The stock is below $5 a share today. It's at a new 52 week low, really at its lowest level birth that we've seen in years, even following, falling below that earlier pandemic low. But is it all on the shoulders of the Ceo, I mean, are you confident that a new Ceo can actually turn things around? Because this former Ceo, the outgoing Ceo actually had a lot of momentum behind him. People on the street really liked him. That's because the people on the street don't know the detail and the rhythm of retail christian, the way the way you can tell you and, and and others knows so well. He was a merchant and a very good merchant at target, but he never run a company before and this is a very difficult company to run. It's got a number of different operating divisions. They bought out businesses started by their Children. So, bye bye baby. A very good asset. Armand drug could be a good asset, but they have twice as many, they have 700 to 1000 more stores than what they actually need. And they've been reversed category killed by everybody from target to the dollars dollar stores to the category, dominant stores. And they benefited from the bankruptcy of Linens and things and a number of others during the last retail recession in 2008, but there's nobody for them to knock off and they're facing much better capital,ized much more capable competitors and their future is very uncertain at best, would not buy the stock and short sellers are making a lot of money. Okay, well, let's talk about the future of this company in particular before we talk generally about the retail space. Again, the stock below $5 a piece Near its lowest level in decades. Birds. So certainly feeling the pain. What's the path forward? Has a new ceo? Could we see a potential bankruptcy? Could we see it actually be acquired at a stock price of less than $5 a share is an attractive takeover target. It's an attractive takeover target. Kristen at a dollar or $2 a share. One quick qualification. The founding families deserve a tremendous amount of credit for making this a retail powerhouse for the better part of half a century. And they just ran out of time as other competitors, uh, site saturated their trading areas and got ahead of them on the internet. That said a new Ceo can't fix it fast enough if they sold bye bye baby to a strategic, potentially a target, potentially a CVS that would help selling harmon harmon drugs as a deep discount drug form format. The mickey mona's Jack Futterman and others made a tremendous amount of money with over the years. That could be a good acquisition for CBS or potentially an international drug chain and the best way to, for them to monetize the company is to sell the leases and the real estate property assets that they have, uh, to strategic shopping center buyers that can reconvert it to companies that are more profitable per, per property and per square foot because this, this, this is a company with low productivity per square foot, but the real estate's got great modernization, but christian, it's got to be fastest lightning because they're burning close to 100 million in cash every month. They operate us, they're operating now. So they've got a tall task ahead of them Burt to say the least. As you just laid out there. What about other retailers? Are there other retailers that you're worried about whether it's bankruptcy executive changes potentially being purchased themselves. I mean, target one of the biggest ones out there, clearly struggling walmart to some extent to. But Target actually seems to be underperforming not so sure a company that they will actually be taken over. But what's your general read Kristen the key cheddar headline for all, all consumers in all investors is all of retails of train wreck. I just got back from Indianola Mississippi with our team walmart Supercenter 3 77 parking lots empty. Same with the Walmarts in their home state and little rock. Everybody's struggling every class of retail trade with the exception of food retail and with the exception of wholesale clubs and the customer accounts even in wholesale clubs have been dropping. So run from retail. The only safe harbor is really agriculture and and food at this point, food retail and ideally food distribution. But I forecast the epic retail recession in 2006 that hit between 2008 and 2010 and this one kristen and cheddar headline, This retail recession is going to be as bad or worse, Burt, certainly sounding the alarms. All of retail is a train wreck in his own words, and does call for a recession here on the horizon. That was Burt Flickinger managing director, a strategic resource group.