Members of the Nordstrom family are thinking of taking back complete ownership of the department store, the company announced Thursday — a move that could give the family more flexibility as it tries to shield the company from the issues plaguing the retail sector.
Nordstrom’s stock price jumped by as much as 16 percent Thursday morning on the news. The stock closed up 10 percent for the day, at $44.63.
No official deal has been made, but Nordstrom’s board has formed a special committee of independent directors to evaluate any potential offers.
The group exploring options for taking the company private includes co-presidents Blake, Peter and Erik Nordstrom. It also includes president James Nordstrom, chairman Emeritus Bruce Nordstrom, and Anne Gittinger, the granddaughter of John Nordstrom, who co-founded the store in 1901. Together, the family members own 31.2 percent of the company’s shares.
Taking the company private could give the Nordstroms more room to experiment with different strategies without having to answer to shareholders, said Kathy Gersch, a former executive at Nordstrom who is now an executive vice president at Kotter International, a management firm. “I see it as a positive opportunity for them to really invest in the future of the company,” Gersch said.
Nordstrom has struggled along with other department stores — including Macy’s, Sears and J.C.Penney — as consumers have migrated from strolling through sprawling malls to doing more of their shopping from home online. Many big-box retailers have shuttered stores in recent months to adjust to the shift in consumer trends.
Nordstrom Rack, the company’s discount chain, has served as a bright spot, however. While many shoppers have shied away from malls, cost-conscious shoppers continue to hit up off-brand stores, such as Nordstrom Rack, T.J. Maxx and Marshalls, in search for deals.
Nordstrom has also been able to maintain some pricing power and produce more robust sales growth than some of its competitors because it targets a sweet spot of consumers who want value but are still willing to spend, Bridget Weishaar, a senior equity analyst for Morningstar, wrote in a research report last month. Nordstrom caters to people who want to spend more than they would at Macy’s or Kohl’s, but still want lower price tags than what they would see at luxury retailers.