Economy

Nordstrom family backs off effort to take retailer private

Nordstrom family backs off effort to take retailer private”

Nordstrom, which put itself on the shopping block this summer, said Monday it is suspending sale talks.

A special committee of Nordstrom board members formed to consider any offer from the company said early Monday it's been told the family group "intends to continue its efforts to explore the possibility of making a going private proposal after the conclusion of the holiday season".

The Nordstrom family originally planned to put up its 31 percent stake in the company, which as of August 1 was valued at $2.5 billion, and private-equity firm Leonard Green & Partners was to contribute another $1 billion in equity. Although family members have been tight-lipped about their reasons for wanting to take the company private, such a move would allow Nordstrom more freedom to experiment with solutions while avoiding the scrutiny of public ownership and the pressure of quarterly earnings reports.

Traditional department store chains, burdened by expensive real estate at malls, are struggling to stay abreast of online retailers like Amazon. The share price is down 22.2 percent from a year ago.

Same-store sales for Nordstrom increased 1.7 percent year-over-year in its second quarter, which ended July 29. They dropped 2% Monday on the Nordstrom news. And Sears, which also owns Kmart, has lost a third of its value so far in 2017. Department stores are fighting back, but some worry that it's too little too late. The Company operated 290 United States stores located in 38 states, as well as an e-commerce business through Nordstrom.com, Nordstromrack.com and HauteLook and TrunkClub.com, as of March 16, 2015. Customers will make their purchases online.



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