Nordstrom hires AlixPartners to review potential Rack spinoff, report says

Nordstrom hires AlixPartners to review potential Rack spinoff, report says


Nordstrom Rack in downtown Seattle

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Nordstrom has tapped the consulting group AlixPartners to assist it evaluate a possible spinoff of its off-price Nordstrom Rack enterprise, according to a report from Bloomberg.

Representatives from Nordstrom and AlixPartners did not instantly reply to CNBC’s requests for remark.

A possible evaluate at Nordstrom comes amid a much bigger shakeout within the department-store sector as corporations together with Macy’s and Kohl’s face stress from activists to spin off faster-growing on-line companies from extra conventional retail shops. These buyers encourage such selections with a purpose to fetch the upper valuations usually given to e-commerce retailers.

Macy’s is working with AlixPartners to evaluate its e-commerce operations, after activist group Jana Companions urged the corporate to separate its digital arm from its brick-and-mortar shops. Kohl’s has equally been pressured by activist Engine Capital to think about the identical transfer.

That is after Saks Fifth Avenue spun off its e-commerce operations from its retail shops earlier this yr, and executives have since touted it as a profitable technique. Saks.com is now reportedly making ready for an preliminary public providing in 2022.

Nordstrom, in the meantime, has been struggling to broaden gross sales to pre-pandemic ranges in a bid to match a few of its friends. Within the three-month interval ended Oct. 30, gross sales at Nordstrom Rack fell 8% from 2019 whereas income at its namesake division retailer rose 3% on a two-year foundation.

Chief Govt Erik Nordstrom instructed analysts on an earnings name in November that the corporate had been participating exterior consultants to search for methods to enhance Rack’s efficiency and profitability. “We’re not glad in any respect with our Rack enterprise as clearly our restoration is lagging what we expect it must be,” he stated on the time.

Nordstrom shares closed Monday down lower than 1% at $20.10, having fallen roughly 36% yr up to now. That brings the corporate’s market cap to about $3.2 billion.

Learn the total report from Bloomberg here.



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