Gustavo Arnal was identified as the man who fell to his death from a 57-story Tribeca building Friday afternoon, the New York Police Department confirmed. He was named as a defendant in a class-action securities fraud lawsuit on Aug. 23.
The Bed Bath & Beyond chief financial officer (CFO) was found unresponsive and unconscious in an apparent suicide outside the Manhattan neighborhood’s tallest skyscraper at 56 Leonard Street after telling investors Wednesday the troubled home goods retailer was downsizing stores and jobs to stabilize a business in turmoil and save $250 million this fiscal year. The 52-year-old was pronounced dead at the scene. An investigation into the incident and cause of death is ongoing.
In a statement, Bed Bath & Beyond said it was “profoundly saddened by this shocking loss.”
“I wish to extend our sincerest condolences to Gustavo’s family. Gustavo will be remembered by all he worked with for his leadership, talent and stewardship of our Company. I am proud to have been his colleague, and he will be truly missed by all of us at Bed Bath & Beyond and everyone who had the pleasure of knowing him,” said Harriet Edelman, independent chair of the Bed Bath & Beyond Inc. board of directors. “Our focus is on supporting his family and his team and our thoughts are with them during this sad and difficult time. Please join us in respecting the family’s privacy.”
Shareholders last month named Arnal as a defendant in a class-action lawsuit against Bed Bath & Beyond, JP Morgan Securities, and investor Ryan Cohen and his company RC Ventures, the latter two of which are known as “meme-stock” champions, court documents said. “Cohen has historically employed pump and dump schemes to raise much needed capital and has ignited several meme stocks to jaw-dropping heights,” according to the complaint filed with the United States District Court for the District of Columbia.
The suit claims Arnal and Cohen conspired in a “fraudulent scheme to artificially inflate” Bed Bath & Beyond’s share price and yield $110 million in insider trading, further describing the company’s turnaround narrative as “almost entirely a fiction.”
The timing of Arnal’s death raises questions about the Union, N.J. company’s future as it puts new financing to work and scuttles several private labels in favor of national brands including Ugg, Dyson, Cuisinart, Oxo and Calphalon. Jefferies analyst Jonathan Matuszewski believes that cutting supply chain jobs as part of a 20 percent headcount reduction poses an “execution risk,” given the company’s challenges and current macroeconomic climate heading into the make-or-break holiday season.
Executives on Wednesday’s strategic update call seemed to tapdance around questions regarding the company’s relationships with its roughly 4,600 suppliers. Interim CEO Sue Gove, who was brought in after Bed Bath & Beyond fired Mark Tritton two months ago, told Wall Street analysts the company hasn’t seen any “holistic changes” with any of its suppliers in recent weeks, comments that seemingly oppose its recent Securities & Exchange Commission filing. The company said some Bed Bath & Beyond “vendors and suppliers have requested and/or been granted more stringent payment terms,” which might include paying for merchandise prior to invoicing or requiring additional letters of credit, according to a corporate prospectus published Wednesday.
Arnal, who joined the troubled home goods retailer in May 2020 from Avon after stints with Procter & Gamble and Walgreens Boots Alliance, also took a somewhat different stance than Gove. “As we have managed through our cash burn, we have seen changes in some of our vendors,” which the company is managing week to week, he said in the update call. The retailer churned through $325 million in the second quarter as of Aug. 31, he added.
Vendors might have little incentive to re-engage with a retailer so closely associated with a potential bankruptcy filing, especially after Bed Bath & Beyond’s much-ballyhooed pivot to owned brands nearly 18 months ago likely left some suppliers out in the cold.
Gove, however, reassured investors that she has “personally been engaging with vendors.”
“Probably one of the most telling pieces to me in terms of their receptivity [to our new national brand focus] is how they are parroting back to us our strategy, and that’s come in the form of thank-you notes,” she said, adding, “I think there is a very wide-open-armed embrace to where we’re headed.”
Bed Bath & Beyond brand president Mara Sirhal chimed in noting vendors’ “overwhelming response of support and delight in our focus and where we believe national brands will play…a role.”
“We have a lot of partners who still care deeply about their distribution strategies and really look to us as a leader to bring their products to life,” she said.
Sirhal, who came to the home goods chain from Macy’s last year, said Bed Bath & Beyond is working with national brand partners to ensure “meaningful exclusivity” in holiday-season product and beyond.
One day prior to Arnal’s death, the retailer said it completed $500 million in new financing, including an asset-backed revolving credit facility expanded by $130 million to $1.13 billion and a new $375 million “first-in-last-out,” or FILO, facility. Improving liquidity will play a key role in ending a lengthy money-losing streak.
Bed Bath & Beyond has recently seen other notable changes among its finance leadership. John Barresi lasted just one year as chief accounting officer after joining the chain from Tiffany & Co. in June 2021. Longtime company vet Laura Crossen, who was elevated to replace Barresi from her role as SVP of treasury, tax and finance transformation, was named interim CFO in addition to her chief accounting duties effective Sept. 5, the company reported in an SEC filing Tuesday.
Financial executives often have a way of signaling further upheaval ahead. For example, the former CFO for Slync left earlier this year after warning investors the embattled supply chain software company’s CEO was “misrepresenting” annual revenues figures “by a factor of at least 30.” The Texas firm, which had missed payroll more than once, has since fired chief executive and co-founder Chris Kirchener.
Bed Bath & Beyond’s auditor is KPMG, which recently agreed to pay a 14.4 million-pound ($16.57) fine after the UK’s Financial Reporting Council investigation found it provided “false and misleading information and documents” to the audit watchdog in relation to KPMG’s audits of two firms, including one that went bankrupt.
The retailer is scheduled to provide its next quarterly report on Sept. 29.