Nordstrom won't go private...yet

The latest wave of retail bankruptcies has given Nordstrom cold feet. The upscale department store operator will be shelving its plans to go private, at least for the time being.

Earlier this week the Seattle-based company said the namesake family members have stopped actively exploring a path to take it private.

However, the company advanced that members of the Nordstrom family, which owns more than 30 percent of the stock, may still consider a plan to take the iconic retailer private after the key holiday shopping season.

It’s worth recalling that back in June, some members of the Nordstrom family — including company co-Presidents Blake, Peter and Erik Nordstrom — said they were thinking about acquiring the approximately 70 percent of the stock they don't already own. Going private could give the upscale retailers more flexibility to navigate a rapidly changing retail environment, noted analysts back then.

Nordstrom (JWN) shares fell nearly 5 percent on the news, sharing the burden with other fellow retailers such as Macy’s (-2 percent on Monday), JCPenney (JCP) was down 1 percent Monday and, on a related note, Sears stock plummeted nearly 10 percent on the same day after a key investor, Bruce Berkowitz of mutual fund firm Fairholme Capital, said he was stepping down from the company's board at the end of the month.

This niche has been reeling lately, with Macy's (M) shares falling nearly 45 percent this year, Sear’s stock plunging 60 percent in the year to date and Sears (SHLD), which also owns Kmart, having lost a third of its value so far in 2017. Furthermore, a couple of lucrative deals with Amazon haven’t been enough to save Kohl's (KSS), which stock is down 15 percent in 2017.

Investors have grown increasingly nervous about sluggish sales as customers shop more online. Department stores are fighting back, but some worry that it's too little too late.

Nordstrom recently announced plans for new Nordstrom Local stores that would let people buy clothes selected by personal stylists. These stores aim at bridging the virtual and physical shopping experiences: the stores will not have inventory, requiring customers to make their purchases online.

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Photo:Nordstrom Online

 

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