Report: Nordstrom reviewing possible Rack spinoff

Nordstrom Inc. is reportedly reviewing options for its off-price Rack division.

The department store chain has hired AlixPartners to help it review a possible spinoff of Rack into a separate company, reported Bloomberg. The business has struggled to return to pre-pandemic levels. For the quarter ended Oct.30, Nordstrom reported that Rack sales fell 8% compared to the third quarter of 2019. The retailer said it was “taking action” to improve performance at Rack, including optimizing inventory levels, better balancing price points and increasing brand awareness.

“We are not satisfied at all with our Rack business as clearly our recovery is lagging what we think it should be,” CEO Erik Nordstrom told analysts on the company’s third-quarter earnings call.

Nordstrom is not the only department store company reviewing their business. Macy’s has tapped AlixPartners to evaluate its online operations at the urging of activist shareholder Jana Partners, which valued the company’s digital business at about $14 billion, the Bloomberg report said.  

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