Ryan Cohen Takes Stake in Nordstrom; Activist investor plans to urge retailer to refr | JWN Message Board Posts


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Msg  45 of 50  at  2/3/2023 12:51:03 PM  by

jerrykrause


Ryan Cohen Takes Stake in Nordstrom; Activist investor plans to urge retailer to refr

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Ryan Cohen Takes Stake in Nordstrom; Activist investor plans to urge retailer to refresh its board and replace former Bed Bath & Beyond boss as a director

 

Ryan Cohen is now one of Nordstrom's largest nonfamily shareholders. 

Activist investor Ryan Cohen is amassing a sizable stake in Nordstrom Inc. and intends to urge the upscale department-store chain to make changes to its board following a steep share-price decline, according to people familiar with the matter.

Mr. Cohen, known for helping ignite big rallies in so-called meme stocks including GameStop Corp., is one of the top-five nonfamily shareholders of Nordstrom, the people said.

Shares of Nordstrom surged 28% to $27 in Friday premarket trading following the Journal's article.

Mr. Cohen, who built his fortune on online pet retailer Chewy Inc., hopes to engage with Nordstrom's management about a targeted board refresh that he believes can support cost-cutting efforts as sales decline, the people said. He has expressed admiration for Nordstrom's attention to customer service, they added.

His goal is to replace at least one director, with a particular focus on former Bed Bath & Beyond Inc. Chief Executive Mark Tritton, who chairs the compensation committee and whom Mr. Cohen views as conflicted and unqualified, the people said.

Before his roles at Bed Bath & Beyond and as chief merchandising officer at Target Corp., Mr. Tritton worked for Nordstrom from 2009 to 2016. Mr. Cohen believes it is inappropriate for Mr. Tritton to be deciding compensation for Nordstrom family members who are executives at the company, given that he used to work around them, the people said. Mr. Tritton has served as a director at Nordstrom since April 2020.

"While Mr. Cohen hasn't sought any discussions with us in several years, we are open to hearing his views, as we do with all Nordstrom shareholders," a Nordstrom spokeswoman said in a statement. "We will continue to take actions that we believe are in the best interests of the company and our shareholders."

Mr. Cohen once had a big stake in Bed Bath & Beyond and pushed for changes during Mr. Tritton's tenure at the home-goods retailer, which may soon file for bankruptcy . Mr. Cohen criticized the company at the time for not aligning leadership compensation with performance.

Mr. Tritton was ousted as Bed Bath & Beyond CEO in June as sales started to drop after a temporary surge in demand for cleaning products and home items lifted the business earlier in the pandemic.

Mr. Cohen cashed out of his position in Bed Bath & Beyond in August, before the shares plummeted, netting a profit of about $60 million , based on an analysis of regulatory filings.

Mr. Cohen has recruited a pair of director candidates, who have held senior-executive roles at major retail and e-commerce companies, that he could potentially nominate to Nordstrom's board, the people said. His goal is to strike a deal with the company through private negotiations, they said. Nordstrom's window for director nominations ahead of its annual meeting opened on Jan. 18 and closes Feb. 17, according to proxy materials.

As of March 11, 2022, members of the Nordstrom family together beneficially owned roughly 30% of the company's common stock, according to an annual filing —which means that effecting change would be difficult without their support. Erik Nordstrom serves as the company's chief executive and his brother Peter is president and chief brand officer. Both men are also directors.

Mr. Cohen previously traveled to Seattle, where the company is based, to meet with members of the family and learn more about the business, the people said.

Nordstrom, like other department-store chains and specialty-apparel retailers, has been walloped by supply-chain challenges that persisted for much of the Covid-19 pandemic. It has also had to manage changing consumer preferences . Its shares, after briefly surging earlier in the pandemic, resumed a multiyear slide and currently change hands for about $21 apiece, down from a 2015 high of more than $80. Nordstrom's market value has shrunk to about $3.4 billion.

Nordstrom in January reported declining holiday sales as shoppers kept a tighter grip on their wallets. Sales during the nine weeks that ended Dec. 31 declined 3.5% from a year earlier, leading the company to say its full-year forecast would be on the low end of a previous range.

Like many retailers, Nordstrom has also been grappling lately with bloated inventory levels as supply and demand fluctuates, prompting the company to take a more aggressive approach to discounting in the final weeks of 2022. Nordstrom has said it anticipates year-end inventory levels to be down by a double-digit percentage compared with last year and roughly on par with 2019 levels.

The company is set to report its fiscal fourth-quarter and full-year results on March 2, according to its website.

In early January, Nordstrom appointed Atticus Tysen, chief information security and fraud prevention officer for Intuit Inc., to its board, which now numbers 10 directors.

Nordstrom Chief Merchandising Officer Teri Bariquit announced her retirement in January, after Chief Financial Officer Anne Bramman stepped down from her role in December.

Nordstrom last year adopted a so-called poison pill to prevent outsiders from boosting their stake in the business, after a Mexican company acquired a 9.9% stake .

The Nordstrom family offered to take the company private in 2017 for about $50 a share but abandoned the transaction after it had difficulty securing financing.

There has been a surge in shareholder activism lately, as the investors find opportunities in beaten-down shares of companies with cost structures seen as bloated and other challenges.

 


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