Nordstrom’s founding family in new bid to take US retailer private

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Nordstrom’s founding family: On Tuesday, sources said that the founding family of Nordstrom Inc is trying to take the US department store operator private again, six years after an unsuccessful effort at the same thing.

Discussions of the merger are taking place as American stores like Nordstrom battle with customers cutting back on discretionary spending due to rising prices and interest rates. Another operator of department stores that has been a takeover target is Macy’s Inc. (opens new tab).

A person close to the matter revealed that Nordstrom had requested that Centerview Partners and Morgan Stanley, two investment banks, contact private equity firms to assess their level of interest in a possible merger.

The individuals, who requested anonymity due to the sensitive nature of the topic, however said that reaching an agreement is not guaranteed.

Morgan Stanley and Nordstrom both chose not to comment. A representative from Centerview did not immediately return a message seeking comment.

The announcement on Tuesday caused Nordstrom’s stock to surge 12% to $19.22, valuing the firm at $3.2 billion. Debt, less cash on hand, amounts to approximately $2.3 billion for the business.

In addition to its e-commerce platform, Nordstrom boasts over 350 physical stores. About 30% of the Seattle-based company’s ownership is held by Chief Executive Erik Nordstrom and other Nordstrom family members.

In 2017, in response to a family request for privatization, Nordstrom established a special board committee to investigate potential deals with various private equity firms, one of which being Leonard Green. In 2018, the special committee rejected a bid of $8.4 billion, deeming it insufficient.

As a result of price-conscious customers weighing on revenue, Nordstrom predicted yearly earnings that were significantly lower than Wall Street estimates earlier this month. The company’s Nordstrom Rack discount brand, which has been expanding, is one bright light.

With an offer of $6.6 billion, investment groups Arkhouse Management and Brigade Capital have challenged Macy’s board of directors and are attempting to take the company private. Macy’s is still in negotiations with these corporations, notwithstanding their rejection of their advances thus far.

Billionaire investor and CEO of video game retailer GameStop Corp. Ryan Cohen disclosed last year that he had acquired a 4.2% interest in Nordstrom, but he did not proceed with his intentions to challenge the board of directors.

Ethan Sullivan

Ethan's penchant for the pulse of the fashion world extends to covering lifestyle topics, offering readers a seamless blend of the latest style updates and lifestyle trends.

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