Fried-day:

In May 1998 I wrote a column in

Fortune

that was titled, "High Noon at Nordstrom." It was about how

Nordstrom's

(JWN) - Get Report

stock could wind up on the "sale" rack if it didn't get its act together. It had become a victim of the classic "family-run business syndrome": too much growth too quickly, too few controls and too backward in technology. The stock fell then rose then

really

fell, as the once revered retailer suddenly struggled.

But the Seattle-based company's worst days may be behind it. It's not popular to talk about retailers in a rising interest-rate environment, but Nordstrom has been left so far in the dust that some investors who are starting to nibble at its shares think it's one of those it-has-nowhere-to-go-but-up stories. The buyers include one hedge fund manager, who specializes in retail, who has been more short Nordstrom than long Nordstrom in recent years. "I like to buy great companies at a great price and this may be a great company at a great price," the hedge fund manager says. "The stock is down 50% from its high of last April, and the stock trades at a 50% discount to the

S&P 500

." It closed Thursday at 27 9/16.

His reasons for once again buying the company go beyond valuation, however, and can be traced to a series of press releases in recent months. This column often warns against companies with printing presses that work overtime churning out press releases. But it depends what the releases are saying. If they're just touting another contract or a new product that hasn't been developed it's one thing; if they're talking about major changes, it's another. With Nordstrom, you wouldn't necessarily connect the significance of the press releases unless you knew what you were looking for.

One of the first important releases came Feb. 2, when Jim Nordstrom retired from the company as co-president. He was one of a handful of Nordstrom brothers/sisters/cousins who had been co-presidents. One week later the company launched its first-ever national branding campaign -- a sign that the company was breaking with its conservative roots.

Two weeks later: The remaining Nordstroms had been reassigned, leaving CEO John Whitacre -- a non-Nordstrom, but long-time Nordstrom employee -- in full control. At the same time the company announced a better-than-expected fourth quarter. And in early March, for the first time -- and without fanfare -- the company reported monthly

comparable store sales, a sign that it is getting ready to play to Wall Street. (And the sales figures were good, which is impressive considering that the compounded annual growth rate of comp-store sales for the past five years, according to a Nordstrom fan, was zero. Some analysts are starting to whisper that based on data they've been able to find, first-quarter comps may be substantially better than expected.)

Just as important, perhaps, is that the company is trying to shake its reputation, in women's fashion, of carrying mostly conservative clothing. (Go into the Nordstrom by my house and you can't help but notice the color of the first floor: bright orange. That, apparently, is part of the change -- a change that my 15-year old actually

liked

TST Recommends

! And that teenage market is considered crucial.)

What's more, in recent days, several analysts have started to comment on the changes, especially the change in merchandising. "Analysts love something that is open-ended," the hedge fund manager says. While the whole retail group has been quashed, he notes that Nordstrom's operating margins are still 3 to 4 percentage points below its peers. Each 1 percentage point change adds 25 cents per share to earnings. "The fact is its sales per square foot is higher than its peers, and its profits are lower," he says. "That's potentially huge leverage."

One potential negative, as this column

pointed out, is the possibility that Nordstrom joins the ranks of other retailers that surprise Wall Street with news that its dot-com business is costing more than expected. (What's more, Nordstrom is going heavily into shoes. Do women really buy "fashion" shoes online?) However, the online biz is still small relative to the rest of the company. With more aggressive merchandising there's also a chance of more "markdown" exposure. (So the Rack stores do better?)

P.S.:

Andersen Consulting

is quietly behind many of the changes, just as it was behind the changes at

Best Buy

(BBY) - Get Report

.

Nordstrom officials, who apparently aren't willing yet to make a big fuss about their changes, couldn't be reached for comment.

On that unusually positive note:

I'm outta here (again!) for a week. The one good part about living in the Northeast is schools have winter breaks and spring breaks. But not before tonight's taping at

Fox

.

Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at

herb@thestreet.com. Greenberg also writes a monthly column for Fortune.

Mark Martinez assisted with the reporting of this column.