Story
Barington Capital Takes Bath & Body Works Stake, Pushes for Sale: Report
Activist investment firm Barington Capital Group has taken a new stake in Bath & Body Works Inc. (BBWI) and is pushing the company to explore a potential sale, Bloomberg News reported Thursday, citing people familiar with the matter. The news prompted a rally in the fragrance maker's shares in after-hours trading.
Barington's Position
According to the report, Barington CEO James Mitarotonda believes Bath & Body Works is undervalued and has been hampered by unstable management. In an interview cited by Bloomberg, Mitarotonda stated that "changes are needed" at the retailer.
The activist firm is reportedly urging the company to hire advisers to seek potential buyers. Mitarotonda noted that Bath & Body Works' strong market position, brand recognition, and cash generation should attract significant interest from acquirers, including private equity firms.
AdMarket Reaction
Investors reacted positively to the news of a potential activist campaign and the prospect of a sale. Following the report, shares of Bath & Body Works rose approximately 3% in extended trading on Thursday.
This development puts new pressure on the board and management of Bath & Body Works to consider strategic alternatives to enhance shareholder value. According to a subsequent report from Reuters, neither Bath & Body Works nor Barington Capital immediately responded to a request for comment.
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