Activist investor Ryan Cohen builds sizable stake in Nordstrom: Reports

Yahoo Finance Live anchors discuss reports that activist investor Ryan Cohen has taken a position on Nordstrom’s board.

Video Transcript

JULIE HYMAN: Another mover that we are watching this morning, "Meme work makes the JWN dream work," was the title of our friend Simeon Siegel's--

BRIAN SOZZI: Aw, Simeon.

JULIE HYMAN: --note on Nordstrom after activist investor Ryan Cohen reportedly garnered a sizable stake in the company, intending to urge a shake-up in its board. He has set his sights on replacing former Bed, Bath & Beyond CEO Mark Tritton, in particular, on the board of the company. This according to multiple reports, was first reported by the Journal. But I know you've confirmed this news as well, Mr. Sozzi.

You know, I don't know what he thinks he's doing. It's a family controlled company. And there have not been too many activist attempts at family controlled companies because the family controls the company. So I'm not quite sure. They've said that they're willing to work with him, yada yada. I don't know how this is going to play out.

BRIAN SOZZI: Well, yes. So Ryan Cohen has taken a position here. Our source tells me now Nordstrom is responding that they have, in a statement to Yahoo Finance, they've not had any-- Mr. Cohen hasn't sought any discussions with us in several years. And, you know, this goes back to, I think, my long running thesis on Ryan Cohen. It's unclear what he's trying to do with these companies because is he-- what did he did at Bed, Bath & Beyond was essentially squat.

And I don't know what his plan here is here with Nordstrom. But if it's anything like what he did at Bed, Bath & Beyond, it's probably no plan. And it's just-- I will say this, though. Nordstrom shares down about 45% over the past five years, down even more, of course, before this move by Cohen. There are opportunities, I think, for Nordstrom either to, let's say, spin off their Rack business from their full price stores, and also improve operating margins.

Now, for all the great customer service that Nordstrom offers and the Street loves the brand for that, it's come at a cost. They've invested millions upon millions of dollars in developing the services they do have-- buy online, ship from store, you name it. But it depressed margins. And there's a vibe that they could and should be doing better. But again, to your point, Julie, this is family controlled. Ryan Cohen's track record here in terms of true activist investing. Nelson Peltz, he is not-- is wildly-- just wildly unproven and wildly unclear. And I just don't see what he's going to get done here.

BRAD SMITH: You know, I think on Sunday, I'm going to pray that God give me the confidence of a Ryan Cohen to go in and try to have all of these turnaround stories when, really, my only proven thing perhaps has been in the pet category. This is a different type of shopper that you're going after.

BRIAN SOZZI: GameStop.

BRAD SMITH: GameStop.

BRIAN SOZZI: That story is getting worse.

BRAD SMITH: GameStop unproven. You've got a potential Nordstrom play here, unproven that he would be able to make a major wave in a very affluent consumer driven retail environment and experience as well.

BRIAN SOZZI: He's been dead wrong about GameStop. That fundamental story has gotten worse over the past six months. He's still on that board. He was proven, I think, wrong on Bed, Bath & Beyond. He essentially did nothing there. And I think this has now just become personal for Ryan, where he just wants to attack Mark Tritton. He just does not like Mark Tritton. And I can tell you, Mark Tritton doesn't like him.