Say want you want about Ryan Cohen and his activist investor activities: he’s not just another outside agitator looking to make money by charging into what he considers a poorly run, undervalued company and telling them how to do it better.
He’s a specialist.
From his earlier forays at Game Stop to his subsequent in-and-out at Bed Bath & Beyond to his most recent incursion into Nordstrom’s, he has focused on retailers and retailing, believing that his track record running Chewy makes him an expert that others need to pay attention to.
All of which raises the questions: Is he…and should they?
There’s no disputing that he made Chewy, the online pet food and products retailer a big success. It was a game changer in that market sector and the other big, more physical-based retailers are still dealing with its wake.
It’s when he went after Game Stop, the in-store and online retailer of video games and their ilk, that things get a little more complicated. This is where Cohen decided he wasn’t just going to hit and run, he was going to stick around and run the place. This may not have been his best decision as his track record as CEO is decidedly mixed. Maybe this is a long-play for Cohen but so far it’s fair to say he hasn’t replicated his Chewy success.
His Bed Bath & Beyond encounter was something else entirely. He announced with great fanfare that he had bought a serious chunk of the company in 2021 and while he wasn’t interested in running it, he wanted some of his people on the board. BBB tried to placate him but it seemed that even before the ink had settled on the stock transfer paperwork he was gone, selling off his holdings, disappointing the crap out of his meme-stock trading followers and pocketing somewhere in the neighborhood of $60 million. Not exactly Carl Icahn or Fast Eddie Lampert territory but not bad for a few month’s work.
Now he’s come after Nordstrom. The family-run and mostly-controlled department store has been criticized by many outsiders as not aggressive enough in making its business better but nobody has been brazen enough to try a full-frontal attack.
And this is where, excuse the mixed-movie metaphor, it seems to be personal, not just business. One of his big demands seems to be that he wants to remove a specific director from the Nordstrom board and, eureka, it’s Mark Tritton, the deposed CEO of Bed Bath, who Cohen had gone up against before. He thinks Tritton shouldn’t be on the board based on his track record…even though he previously was a merchandising executive with the company.
Maybe there’s more to this but it sure seems like an odd coincidence with Tritton as the common denominator.
The difference is that the Nordstrom family still makes the calls at the retailer, unlike BBB where other private equity investors were up to their coupons in the place.
It’s another retail rendezvous we’ll all be watching to see how it all turns out. I think Nordstrom is one of the better run retailing businesses in the country: think about it, how many other department stores have survived into the 21st Century? Ryan Cohen has had big successes but so far it doesn’t seem to be consistent.
But in the meantime, he will be delivering what seems to follow him whenever he goes after another retail target: distress.
WarrensReport 