Shoppers walk right into a Nordstrom department store on March 03, 2023 in Austin, Texas.
Brandon Bell | Getty Images
Nordstrom on Monday said it has tapped former Nike operating chief Eric Sprunk to hitch its board, as the corporate faces pressure from an activist investor.
Nordstrom shares rose about 4% on Monday to shut at $17.00.
Sprunk, who was Nike’s COO from 2013 to 2020, will join the board immediately, the corporate said. With the appointment, Nordstrom said its board will grow to 11 directors.
In a news release, Nordstrom board member Brad Tilden highlighted Sprunk’s “track record of driving e-commerce growth and large-scale transformations inside a fancy global business.”
The move comes because the retailer’s performance gets scrutinized by some investors, including Ryan Cohen, an activist investor. Cohen, founding father of Chewy and chairman of GameStop, bought a serious stake in Nordstrom in February with plans to shake up the retailer’s board, in accordance with people acquainted with the matter, who wished to stay anonymous attributable to the private nature of the discussions.
Considered one of those requested changes was removing Mark Tritton, former Bed Bath & Beyond CEO, from the board, those people said. Cohen previously bought after which sold a serious stake in the house goods retailer, which is now on the verge of bankruptcy.
In a proxy filing Monday, the corporate said it “received notice from a shareholder stating its intention to nominate two candidates for election to the Board on the Annual Meeting, which notice was later withdrawn.”
Nordstrom declined to say whether Cohen is that shareholder and if he influenced Sprunk’s appointment. Cohen’s firm, RC Ventures, has been contacted for comment.
Yet the proxy also hints at a possible ongoing dispute with Cohen. In line with the proxy, Cohen has made moves to hunt a bigger stake in the corporate. In early March, his firm formally requested a waiver of a board provision so he could acquire as much as 19.9% of Nordstrom’s common stock. His firm owned 4.2% of the corporate’s common stock as of early March.
Nordstrom’s board provision, called a Rights Plan, was adopted last September. It is meant to guard the corporate and shareholders from a takeover, similar to a entity, person or group gaining control of the corporate by surreptitiously amassing a big stake.
Within the proxy, the board recommends that shareholders vote to increase that provision until Sept. 19, 2025. Shareholders will vote at the corporate’s annual meeting, which will likely be in the approaching months.
Because the retail backdrop gets tougher, Nordstrom has reported slowing sales and falling profits. The high-end department store’s net income fell to $119 million, or 74 cents per share, from $200 million, or $1.23 per share, in the vacation quarter compared with the year-ago period. Net sales for the corporate’s namesake banner decreased 2.4%, and net sales for its off-price banner, Nordstrom Rack, dropped 8.1% within the quarter versus the year-ago period.
This fiscal yr, the corporate said it expects revenue to drop by between 4% and 6%.
– CNBC’s Gabrielle Fonrouge contributed to this report.
