Activist investor Ryan Cohen has racked up a sizeable stake in department store chain Nordstrom (NYSE:JWN), the Wall Street Journal reported. Cohen has emerged as one of the top-five non-family shareholders of the company. Nordstrom shares rallied nearly 31% in Thursday’s after-hours trading session and are up over 34% since the start of this year.
Cohen, the co-founder and former CEO of online pet retailer Chewy (NYSE:CHWY), is known for triggering a meme-stock frenzy in stocks like GameStop (NYSE:GME). Earlier this month, WSJ reported that Cohen has built a stake in Chinese e-commerce giant Alibaba (NYSE:BABA) and is pushing the company to further boost its share buyback program.
Cohen Seeks Board Changes
Cohen intends to have talks with Nordstrom’s management about a board shake-up to support cost reduction initiatives as the company continues to struggle with weak sales. He is particularly looking to replace former Bed Bath & Beyond (NASDAQ:BBBY) CEO Mark Tritton, who has not only been serving as a Nordstrom director since April 2020 but also chairs the compensation committee. Tritton was ousted as BBBY’s CEO in June 2022 following criticism by Cohen about the company’s “overly ambitious” strategy.
Tritton worked at Nordstrom from 2009 to 2016. Given Tritton’s prior association with Nordstrom, Cohen feels that it is not appropriate for him to decide the compensation for members of the Nordstrom family who are executives at the company. As per an SEC filing, the Nordstrom family members beneficially owned an aggregate of 30% of the company’s common stock as of March 11, 2022.
“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,” said a Nordstrom spokeswoman. It’s interesting to note that last year Nordstrom adopted a “poison pill” to prevent outsiders from building their stake in the company, after Mexican department store chain Liverpool disclosed a 9.9% stake.
Is JWN a Good Stock to Buy?
Given its dismal performance, Wall Street has a Moderate Sell consensus rating for Nordstrom based on one Buy, nine Holds, and five Sells. The average JWN stock price target of $17.50 indicates a possible downside of 17.2%.