Nordstrom Puts Plans to Go Private on Hold
The family behind the 116-year-old Nordstrom retail chain is shelving its efforts to go private until after the holiday season, the company said Monday. The high-end Seattle-based brand, which has 360 stores across North America, is facing the same economic pressures and competition from e-commerce as other brick-and-mortar retailers. 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. In a regulatory filing on Monday, the company cited “the difficulty of obtaining debt financing in the current retail environment” in the family’s decision to suspend its plans.
Total Retail's Take: Nordstrom family members have been discussing the idea of taking the business private since June, forming a committee of directors to review potential proposals. The idea is that by going private, Nordstrom wouldn't be beholden to public shareholders who demand short-term profits, an increasingly challenging task for brick-and-mortar retailers, particularly department stores. That said, Nordstrom is a relatively healthy company. In it most recent fiscal quarter, Nordstrom reported a 1.7 percent year-over-year increase in same-store sales, and e-commerce sales on Nordstrom.com jumped 20 percent year-over-year. It will be interesting to see if a strong holiday season impacts Nordstrom's decision in 2018 to remain a public company or to go private.