THE WALL STREET JOURNAL. ** Wednesday, March 4, 2020 |B3
The company sells its bedding and home goods mainly through its website, but has plans for stores.BROOKLINEN
to run the company given its
rocky performance over the
past few years. That is un-
likely now with Erik being
named CEO.
The company has had only
one nonfamily CEO since itsfounding by John W. Nord-
strom in 1901.
Nordstrom also said two di-
rectors won’t stand for re-
election at its annual meeting
in May. Gordon Smith, the
chief operating officer of JP-son’s Bay running their re-
spective businesses, the per-
son said.
Department stores have had
a particularly hard time rein-
venting themselves in a world
where shopping has shifted
online. Macy’s Inc. plans to
close 125 stores over threeBUSINESS NEWS
The transaction closed on
Tuesday, the company said.
Mr. Baker is a real-estate
executive who entered the
fashion business in 2006 when
his investment firm paid $1.2
billionforLord&Taylor.He
built a conglomerate that in-
cluded the Hudson’s Bay retail
chain in Canada, Saks Fifth
Avenue, German department-
store chain Galeria Kaufhof
and online flash-sale retailer
Gilt Groupe.
Most of those businesses
were later sold to focus on im-
proving the operations of Saks
and Hudson’s Bay, which were
struggling in the face of com-
petition from online upstarts
and other rivals.
Marketing, public relations
and other shared functions
were decentralized, allowing
the businesses to operate in-
dependently, according to a
person familiar with the situa-
tion.
From here, the company
will be structured more like a
holding company with the
presidents of Saks and Hud-years and recently laid off
about 2,000 employees. And
Barneys New York filed for
bankruptcy last summer,
though its brand is living on in
departments located in some
Saks stores.
Hudson’s Bay in 2017 be-
came the target of activist in-
vestor Land & Buildings In-
vestment Management LLC,
which urged the company to
maximize the value of its real
estate by turning its retail
space—including its Saks Fifth
Avenue flagship store in Man-
hattan—into office towers, ho-
tels or other types of bou-
tiques.
Following the departure of
then-CEO Gerald Storch in
2017, Hudson’s Bay hired Ms.
Foulkes, who had spent more
than 25 years with CVS, most
recently as president of its
pharmacy division. Ms. Foul-
kes was a key part of CVS’s
decision in 2014 to discon-
tinue sales of tobacco prod-
ucts.
At Hudson’s Bay, Ms. Foul-
kes jettisoned Gilt, Kaufhofand other European opera-
tions, as well as Lord & Taylor,
paving the way for the com-
pany to go private.
The divestitures raised
C$2.4 billion in proceeds, of
which C$1.6 billion was used
to pay down debt.
Total revenue slipped less
than 1% to C$5.55 billion in
the nine months that ended
Nov. 2. The net loss widened
to C$935 million from C$823
million a year earlier.
Mr. Baker has said it would
be easier to pull the company
out of its slump away from the
public eye.
“This is the time in retail-
ing to reinvent, to upgrade our
presence online and in stores,
and create a better, more ex-
citing company. Being private,
we’ll be able to do that,” he
said in an interview last week.
With Mr. Baker’s strong
real-estate background, the
company is expected to look at
new ways to unlock value from
its properties going forward,
according to the person famil-
iar with the situation.Hudson’s BayCo.’s chief
executive is leaving the com-
pany, following a deal it
reached last week with share-
holders to go private.
Helena Foulkes joined the
parent of Saks Fifth Avenue
fromCVS Health Corp. in
2018 and helped streamline
the retail conglomerate by
selling businesses and improv-
ing operations. Ms. Foulkes, 55
years old, will depart on
March 13.
Richard Baker, Hudson’s
Bay executive chairman, will
become CEO.
Shareholders last week ap-
proved a transaction with an
investor group that includes
Mr. Baker to take the company
private for 11 Canadian dollars
a share, or roughly US$8.25.BYSUZANNEKAPNERHudson’s Bay CEO to Step Down
Parent of Saks goes
private, with current
executive chairman
taking over the helmHelena Foulkes will leave the
company on March 13.ILYA S. SAVENOK/GETTY IMAGES FOR HBC FOUNDATIONThermo Fisher Scientific
Inc. agreed to pay about $10.1
billion forQiagenNV, a molec-
ular-diagnostics company, bulk-
ing up in the field of infectious-
disease testing.
Thermo Fisher, based in
Waltham, Mass., and Qiagen, of
the Netherlands, said a tie-up
would expand their combined
specialty-diagnostics portfolio,
improve their commercial and
geographic reach and their life-
sciences offerings.
Thermo Fisher provides ana-
lytical instruments and equip-
ment for research, analysis and
diagnostics for pharmaceutical
companies and biotechnology
laboratories. Last year, it gener-
ated $25.54 billion in revenue.
Qiagen sales last year totaled
$1.53 billion.
Qiagen, listed in Frankfurt, is
a life sciences and molecular-
diagnostics supplier, active in
infectious-disease testing.
It has been developing a test
to detect the coronavirus,
which is being evaluated at
four Chinese hospitals. Interest
by several suitors precedes the
recent coronavirus outbreak. In
December, before China dis-
closed the scale of the corona-
virus outbreak there, Qiagen
had said it was pursuing a go-
it-alone strategy amid what it
said were several expressions
of interest.
The deal values each Qiagen
share at €39 ($43.30), repre-
senting a premium of around
23% to Monday’s closing price.
Including debt of $1.4 billion,
the deal is valued at $11.5 bil-
lion, Thermo Fisher said.
“This acquisition provides us
with the opportunity to lever-
age our industry-leading capa-
bilities and R&D expertise to
accelerate innovation and ad-
dress emerging health-care
needs,” Thermo Fisher Chair-
man, President and Chief Exec-
utive Marc N. Casper said.BYCARLOMARTUSCELLIDiagnostic
Firms Set
ADealto
Combine
lish as many as 30 store loca-
tions over the next three years,
including two this year.
Meanwhile, 98% of
Brooklinen’s business currently
is in the U.S., creating an op-
portunity to expand abroad,
Mr. Fulop said, adding the
company plans to do so by ini-
tially targeting other English-
speaking markets.
Last year, Brooklinen re-
tained investment bank Citi-
group Inc. to provide financial
advice for raising new capital.
Mr. Fulop said he warmed
up to taking on more outside
capital as a way to speed up
growth. “Because we boot-
strapped our business from the
get-go, we have been frugal
and deliberate about the
moves we make,” he said.
Mr. Fulop said Summit’s in-
fusion will allow Brooklinen to
move faster than it could with
its own profits. This includes
opening more warehouses to
support international expan-
sion plans. The company cur-
rently has two warehousing fa-
cilities in the U.S.
“We’d like to pursue some
localized distribution in those
countries to get to consumers
as fast as possible,” Mr. Fulop
said. “You need to carry mil-
lions of dollars in inventory
per warehouse. That takes cap-
ital.”estate startup WeWork and
other disappointing tech IPOs.
DTC marketers haven’t been
immune in this climate. Public
investors priced mattress com-
pany Casper Sleep Inc. far be-
low its private valuation and
smaller brands such as chil-
dren’s apparel startup Rockets
Are Awesome are being forced
to slash costs.
Brooklinen co-founders Rich
Fulop and Vicki Fulop said the
company is profitable and
booked close to $100 million in
revenue in 2019, a 40% in-
crease from the previous year.
The profitability and overall
revenue numbers made it an
attractive bet for Summit,
which focuses on larger later-
stage investments, said manag-
ing partner Christopher Dean.
“We won’t invest in companies
that are losing money,” he
said.
Some 40% of Brooklinen’s
daily revenue comes from re-
peat customers, which also
drove Summit’s interest in the
startup.
“The brand has built a suc-
cessful dot-com business
through their own website,”
Mr. Dean said. “We see an op-
portunity to expand that by
adding new product categories
as well as moving into new dis-
tribution channels.”
Brooklinen plans to estab-BrooklinenInc., a startup
that sells luxury bedding and
other home goods online, has
raised $50 million to open
more of its own stores, secure
new wholesale distribution
partnerships and enter inter-
national markets.
The investment comes from
private-equity groupSummit
Partners, the companies said.
They declined to discuss the
startup’s valuation. Brooklinen
previously raised $10 million
from venture-capital firm
FirstMark Capital in 2017.
Founded in 2014 and based
in Brooklyn, New York,
Brooklinen is a so-called di-
rect-to-consumer (DTC) mar-
keter, a consumer-goods com-
pany that sells products to
customers largely through its
website orAmazon.comInc.
Many DTC brands have
raised money from venture-
capital firms and other inves-
tors to fuel sales growth by ad-
vertising onFacebookInc. and
Alphabet Inc.’s Google. Profits
often took a back seat to accu-
mulating market share as
quickly as possible.
That strategy has come un-
der criticism of late as inves-
tors have pushed fast-growing
startups to rein in costs, driven
in part by the cliff dive of real-BYSAHILPATELBedding Brand Brooklinen Raises
$50 Million from Summit Partners
involved in the merchandising
side of the business, for in-
stance, by helping to build
Nordstrom’s presence with
high-end designers.
Some directors had been
seeking to bring in an outsiderMorgan Chase & Co., who has
been on the board since 2015,
will stand down, as will Kevin
Turner, a board member since
2010 and the CEO of Core Sci-
entific.
The board will shrink to 10
members from 11. Directors
plan to introduce a 10-year
term limit for independent di-
rectors, the company said.
Both Erik and Pete Nordstrom
will remain on the board.
The management and board
changes came as the company
reported results for its holiday
quarter and issued a forecast
for 2020. Fourth quarter reve-
nue rose 1.3% to $4.54 billion.
Earnings fell to $193 million
from $248 million a year ago.
The company’s shares fell
about 7% in after-hours trad-
ing. The shares have fallen
about 24% over the past 12
months, compared with a 10%
gain in the S&P 500 index.NordstromInc. named Erik
Nordstrom as its sole chief ex-
ecutive, ending an unusual
shared management structure
and keeping the retailer’s
leadership in the hands of the
founding family.
Previously, Erik Nordstrom
and his brothers had shared
the co-president title.
Pete Nordstrom will be-
come president and chief
brand officer.
The third brother, Blake,
who also had been co-presi-
dent, died last year of lym-
phoma. Before his death, Blake
had handled many of the tra-
ditional CEO duties, including
engaging with Wall Street.
Erik filled that role in his
brother’s absence, according
to a person familiar with the
situation.
Pete has always been moreBYSUZANNEKAPNERNordstrom Brothers End Power-Sharing Leadership
Erik Nordstrom, who becomes sole chief executive, had previously shared the co-president title.MARK ABRAMSON/BLOOMBERG NEWSDONALD C. ROYSTON
FORMER PRESIDENT
VINTAGE MOTOR CAR CLUB OF AMERICASCOTT C. SCHURZ
NEWSPAPER EXECUTIVEMARY EVA SWIGAR, MD
NEURO-PSYCHIATRY EDUCATORALBERTNELSONMARQUIS
LIFETIMEACHIEVEMENTAWARD
STANLEY H. NUSIM, PHD
CHEMICAL ENGINEER, CONSULTANT
SH NUSIM & ASSOCIATESERNEST DORCHESTER BUFF
CHAIR
ERNEST D.BUFF & ASSOCIATES, LLCTHOMAS OPRE
PRESIDENT, CEO (RET.)
TOP SAFARIS INC.HERBERT BAUM
CONSUMER PRODUCTS CO.EXECUTIVEREV. DR. THOMAS R. FLYNN
PRIEST, PHILOSOPHY EDUCATORRUSLAN DESYATNIKOV
FOUNDER, CEO
QA MENTOR, INC.Marquis Who’s Who is
proud to honor its most
distinguished listees
based on their career
longevity, philanthropic
endeavors and lasting
contributions to society.
Out of 1.5 million
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