Nordstrom (JWN) shares soared higher Friday following multiple media reports that suggest billionaire activist investors Ryan Cohen has built a significant stake in the struggling retailer and is pressing for a seat on the board.
Cohen, who has used his influence to push for strategy changes at Bed Bath & Beyond (BBBY), including the ouster of former CEO Mark Tritton, is reportedly seeking to have him removed from the Nordstrom board, where he has served since 2020. Cohen's stake was first reported by the Wall Street Journal.
Cohen himself, the founder of Chewy.com (CHWY) and chairman of the video game retailer GameStop (GME), is not looking to sit on the board himself, but would like to see an e-commerce expert added to the 10-member committee.
"Tritton chairs the Compensation Committee, which Cohen reportedly deems to be 'inappropriate', as Tritton was previously employed at JWN from 2009-2016," said KeyBanc Capital Markets analyst Noah Zatzkin. "We note that the Nordstrom Family currently owns ~30% of the Company's shares."
"While the news of Cohen's stake is likely to be positive for short-term share price, we'd require additional clarity on his involvement to better determine potential long-term implications," he added.
Nordstrom shares were marked 22.2% higher in early Friday trading to change hands at $25.8 each, a move that would lift the stock into positive territory for the past six months and value the Seattle-based group at around $4.2 billion.
Cohen, who revealed a 12% stake in Bed Bath & Beyond through Securities and Exchange Commission filings in March of last year through his RC Ventures LLC investment vehicle, sold his entire stake in late August, netting nearly $60 million from the sale of around 9.45 million shares.
The sale was helped in no small part by a 350% rally over the three weeks prior, on notably heavy retail trading volume, amid a surge in interest linked to a so-called 'short squeeze' that seeks to punish investors betting against a particular stock.
Last month, Nordstrom slashed its full-year profit forecast by around 30%, forecasting earnings for its fiscal 2022 year, which ends in February, in the region of $1.50 to $1.70 per share as holiday sales -- which were already heavily discounted -- fell to below pre-pandemic levels.
That same week, the Commerce Department said U.S. retail sales fell sharply last month, with a pullback in gas prices clipping the overall total but failing to provide a boost to discretionary spending amid elevated inflation and an uncertain job market.
December retail sales fell 1.1% to a collective $677.1 billion, the Commerce Department said, well shy of the Street consensus forecast of a 0.8% decline. The figure is not adjusted for inflation, and includes overall sales of gasoline and other goods that have sharply declined in prices.
The closely tracked control group number, which excludes autos, building materials, office suppliers, gas station sales and tobacco, fell 1.1%, notably weaker than analysts' estimates.
