Barington Capital pushes Bath & Body Works to explore sale

Activist investment firm Barington Capital Group has acquired a stake in Bath & Body Works and is urging the personal care retailer to explore a potential sale. Barington CEO James Mitarotonda stated that the company is undervalued and suggested that its brand strength and cash generation should attract interest from buyers, including private equity firms.

In addition to seeking a sale, Barington is pushing for board representation and wants the company to increase revenue and its stock price through share repurchases. The activist firm cited unstable management and frequent leadership changes over the last five years as factors that have hindered sales and brand performance.

Bath & Body Works has faced a challenging environment characterized by weak store and mall traffic, leading to a decline in sales forecasts. While the company is currently pursuing a turnaround under CEO Daniel Heaf focused on digital platforms and product innovation, the stock has seen significant volatility, falling nearly 13% this year.

Financial analysts have recently adjusted their outlooks on the company. BMO Capital Markets upgraded the stock to a 'hold' rating, while other firms like UBS Group and Barclays have recently lowered their price targets.