Nordstrom adds former Nike executive to board as activist battle continues
Shoppers walk 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 join its board, as the company faces pressure from an activist investor.
Nordstrom shares rose about 4% on Monday to close at $17.00.
Sprunk, who was Nike’s COO from 2013 to 2020, will join the board immediately, the company 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 within a complex global business.”
The move comes as the retailer’s performance gets scrutinized by some investors, including Ryan Cohen, an activist investor. Cohen, founder of Chewy and chairman of GameStop, bought a major stake in Nordstrom in February with plans to shake up the retailer’s board, according to people familiar with the matter, who wished to remain anonymous due to the private nature of the discussions.
One of those requested changes was removing Mark Tritton, former Bed Bath & Beyond CEO, from the board, those people said. Cohen previously bought and then sold a major stake in the home goods retailer, which is now on the verge of bankruptcy.
In a proxy filing Monday, the company said it “received notice from a shareholder stating its intention to nominate two candidates for election to the Board at the Annual Meeting, which notice was later withdrawn.”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, did not respond to a request for comment.
Yet the proxy also hints at a potential ongoing dispute with Cohen. According to the proxy, Cohen has made moves to seek a larger stake in the company. In early March, his firm formally requested a waiver of a board provision so he could acquire up to 19.9% of Nordstrom’s common stock. His firm owned 4.2% of the company’s common stock as of early March.
Nordstrom’s board provision, called a Rights Plan, was adopted last September. It is intended to protect the company and shareholders from a takeover, such as a entity, person or group gaining control of the company by surreptitiously amassing a large stake.
In the proxy, the board recommends that shareholders vote to extend that provision until Sept. 19, 2025. Shareholders will vote at the company’s annual meeting, which will be in the coming months.
As 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 holiday quarter compared with the year-ago period. Net sales for the company’s namesake banner decreased 2.4%, and net sales for its off-price banner, Nordstrom Rack, dropped 8.1% in the quarter versus the year-ago period.
This fiscal year, the company said it expects revenue to drop by between 4% and 6%.
– CNBC’s Gabrielle Fonrouge contributed to this report.