The Nordstrom family, known for their iconic department store, is once again considering the possibility of taking the company private. In a recent announcement, CEO Erik Nordstrom and president Pete Nordstrom expressed their interest in pursuing a take-private deal for the 123-year-old retailer. As a result, the company’s board of directors has formed a special committee to evaluate bids from the Nordstrom brothers and any other potential outside parties.
The formation of this committee demonstrates the Nordstrom family’s commitment to enhancing shareholder value. They aim to determine whether any potential bids are in the best interest of the company and its owners. However, it is important to note that there is no guarantee that a deal will take place or be approved.
This is not the first time Nordstrom has explored privatization. In 2017, private-equity firm Leonard Green & Partners came close to taking the company private, but ultimately, the deal fell apart. At the time, management believed that going private would provide the flexibility needed to adapt to the rapidly changing retail landscape without the constant scrutiny that comes with being a public company.
The department store industry is currently facing an uncertain future. Traditional retailers are struggling with declining sales as many brands shift their focus to direct-to-consumer channels. Instead of relying on department stores to drive their revenue, brands are now prioritizing their own stores and websites. This shift has led to a decrease in interest from wholesalers.
Nordstrom’s interest in going private was first reported by Reuters last month. Following the announcement of the special committee, Nordstrom’s shares rose about 2% in extended trading. Year to date, the company’s shares have increased by approximately 1.5%.
The establishment of this special committee marks an important step in Nordstrom’s potential journey towards privatization. The committee’s evaluation of bids will play a crucial role in determining whether this deal will come to fruition. As the retail industry continues to evolve, it is clear that Nordstrom is actively seeking ways to adapt and remain competitive.
