• by Tanya Gazdik , March 20, 2024

The founding family behind Nordstrom Inc is seeking to take the department store private, six years after a similar attempt proved unsuccessful, people familiar with the matter told Reuters. 

“The deal deliberations come as Nordstrom and other U.S. retailers grapple with consumers curbing their discretionary spending following a bout of inflation and high interest rates,” per Reuters in the exclusive report. “Macy’s Inc., another department store operator, has also become a takeover target.”

Nordstrom shares jumped following the report, according to CNBC, which also noted that the company provided a disappointing sales outlook for 2024 earlier this month. 

The retailer is joining Gap, Urban Outfitters and Under Armour in making big moves to counter weaker demand, according to Marketwatch.  But funding another attempt to take Nordstrom private would be tricky, notes WWD. 

“Nordstrom previously tried to buy the company back in 2017, and finally rejected an $8.4 billion offer in 2018 as insufficient,” according to Inc.

Its share price has fallen since then, with its current market cap hovering around $3.2 billion, leading some observers to estimate the company would need to find about $2 billion to go private again.

“Dealogic data indicates only 7% of U.S. private equity deals worth of $2.6 trillion over the last decade went into retail and consumer companies,” according to Inc. 

That compares "to nearly 15% of the total volume of $1.7 trillion in the prior decade" invested in the sector, Reuters said--making it clearer why some observers consider the sector ripe for big-time financing.

“That kind of investor interest could be further kindled by Nordstrom's continued broadening of its customer base--and hedging its business against future inflation jolts--by adding new lower-price stores to its network,” per Inc. “And if a renewed trend in financing retail might be in the offing, who better to set it than a fashion plate department store like Nordstrom?”