Nordstrom Buys Stake in Asos Brands

Nordstrom (JWN) has acquired a minority interest in Asos brands Topshop, Topman, HIIT, and Miss Selfridge. It says the investment in these brands will not only help drive their growth globally, but will also set the stage for a broader strategic partnership with Asos.

Nordstrom operates a network of more than 350 stores and also sells online. It has been the exclusive distributor of the Topshop and Topman brands in the U.S. since 2012. The latest deal with Asos allows it to expand that exclusivity across North America, including Canada. Additionally, Nordstrom will become the exclusive physical store retailer of these brands globally. (See Nordstrom stock charts on TipRanks).

“Bringing the Asos brands, including Topshop and Topman, to our customers allows us to create newness and excitement for this important dynamic customer segment,” commented Nordstrom Chief Brand Officer Pete Nordstrom.

“Nordstrom is the right partner to help Asos accelerate the growth of our Topshop and Asos brands in this key market…Asos is all about giving customers the confidence to be who they want to be,” said Asos CEO Nick Beighton.

The Nordstrom-Asos partnership is about serving young fashion shoppers in their 20s. The companies plan to make it possible for Asos online shoppers to pick up their orders at Nordstrom store locations starting this fall.

In May, Morgan Stanley analyst Kimberly Greenberger reiterated a Hold rating on Nordstrom stock and raised the price target to $36 from $34. Greenberger’s new price target suggests shares are fully priced at current levels.

Consensus among analysts is a Hold based on 3 Buys, 7 Holds, and 2 Sells. The average Nordstrom price target of $37 implies 1.93% upside potential to current levels.

JWN scores a 5 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to perform in line with market averages.