Nordstrom hires AlixPartners to handle company split – Footwear News
Nordstrom could be the next department store to divest a segment of its business.
The retailer just hired consulting group AlixPartners to help navigate a potential spin-off for its Nordstrom Rack business, Bloomberg reported. The move comes as other department stores like Macy’s, Kohl’s and Neiman Marcus are reportedly considering similar splits.
Macy’s Inc. is also working with AlixPartners as it considers the next steps in its digital business. During a call with investors in November, Macy’s CEO Jeff Gennette said that AlixPartners will serve as âan objective third party company to really pressure test all of our analysisâ with respect to its e-commerce business.
Saks Fifth Avenue parent company Hudson’s Bay Co. also worked with AlixPartners when it split the retailer’s website and stores into two separate businesses in March. This digital arm of Saks Fifth Avenue has reportedly started preparations to file an initial public offering and is targeting a valuation of around $ 6 billion for an IPO in the first half of 2022.
According to a New York Post article, Neiman Marcus is in talks with AlixPartners to help split the company’s website, stores and its Bergdorf Goodman business. However, the company’s CEO Geoffroy van Raemdonck said in a recent interview with WWD that the company has no plans to split up its activities.
Nordstrom and AlixPartners declined to comment.
In November, Nordstrom presented a plan to improve its Rack business after reporting earnings below analysts’ expectations. Part of that plan is to rebalance the assortment and improve the average selling price to better align it with customer expectations. The retailer is also aiming to build brand awareness and drive traffic with a new âNo More Reasons to Rackâ marketing campaign in September.
Erik Nordstrom, CEO of Nordstrom, Inc., said on the call that âRack faces a unique challenge, as buying inexpensively from the same big brands that we offer at Nordstrom is especially difficult in an environment with production constraints and lower clearance levels. . “
In general, activist investors have recently pressured retailers to divide business units in order to free the better performing segments from the weaker ones.
In October, Jana Partners LLC took a stake in Macy’s and sent a letter urging the retailer to split its online and in-store business in order to capitalize on impressive digital growth in recent quarters. In November, Macy’s shareholders, NuOrion Advisors, LLC, sent an open letter to Macy’s chairman of the board requesting the formation of a “digital special committee” to oversee specific proposals for its digital business.