Nordstrom's delisting highlights challenges in the US retail market

US department store chain Nordstrom is once again attempting to delist from the stock exchange, following an unsuccessful bid in 2017. The move comes amid a challenging retail landscape and declining sales, prompting CEO Erik Nordstrom and President Pete Nordstrom, who collectively control 30 percent of the company, to express interest in privatising the department store.

In a statement released last week, Nordstrom said its Board of Directors "is committed to enhancing shareholder value and regularly evaluates a wide range of strategic, financial and operational alternatives as the Company continues to execute its strategic plan."

As previously reported, Nordstrom has formed a special committee, enlisting the expertise of Morgan Stanley and Centerview Partners. This renewed effort underscores concerns about the company's future amid industry changes and growing online competition, exacerbated by inflationary pressures on consumer spending.

The Nordstrom family previously attempted to take the 123-year-old retail chain private eight years ago, however discussions with private equity firm Leonard Green & Partners fell through when it rejected a bid of 8.4 billion dollars as too low. The hope then, as now, was that privatisation would provide flexibility to navigate the evolving retail landscape without the constraints of public scrutiny.

The broader challenges facing department stores in the US are evident, with market share declining by an average of 4.1 percent annually between 2018 and 2023, according to Ibis World. Recent closures of iconic retailers like Barneys underscore the industry's struggles, even as specialty retailers see more positive growth.