Activist investor Ryan Cohen places bet on Nordstrom
Activist investor Ryan Cohen is building a stake in Seattle-based department store chain Nordstrom, the Wall Street Journal reported and Richard confirmed.
Why it matters: Nordstrom, though largely controlled by its founding family, finds itself vulnerable due to its falling share price and the secular decline of the category.
What they're saying: "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 spokesperson said in an emailed statement."We will continue to take actions that we believe are in the best interests of the company and our shareholders."
Details: Cohen, who is the founder of online pet retailer Chewy and a pied piper of the meme stock crowd, has parlayed his winnings into stakes at GameStop, where he is chairman of the board.
- He also got active briefly last year at Bed Bath & Beyond, a situation where he reportedly pocketed an extra $68 million.
- He is now setting his sights on Nordstrom, where he is calling for cost-cutting and the replacement of former Target and Bed Bath & Beyond executive Mark Tritton as head of the retailer's compensation committee.
Meanwhile, Mexican high-end department store chain Liverpool amassed a 9.9% stake in September, per Reuters.
- Nordstrom, in response to Liverpool's investment, passed a poison pill to fend off potential buyers.
Flashback: The Nordstrom family attempted to take their namesake banner private in 2018 with the backing of PE firm Leonard Green, only to have that bid rejected by the board.
- As part of that transaction, the family would have rolled its equity into the deal.
- The family continues to own about a third of the shares.
Be smart: Though the family has the shares to make it difficult to make changes at the company, it also couldn't get its bid past the scrutiny of its board.
- Cohen's presence could strangely work in both the family's and the company's favor.
What we're watching: Cost-cutting and replacing Tritton aren't the kind of moves that will transform Nordstrom, so Cohen likely has other ideas for the retailer.
What they're (not) saying: The company did not respond to requests for comment on stakeholder Liverpool, the poison pill it put into place, the difficulty of transforming a retailer as a public company, or the family's past efforts to take the company private.
- Cohen also declined to comment.