By Lauren Thomas
Members of the family that founded Nordstrom are considering a bid to take the company private, as department stores continue to struggle and Nordstrom's rival, Macy's, is under pressure to sell itself.
Erik and Pete Nordstrom -- the company's chief executive officer and president, respectively -- recently told the board they are interested in exploring a deal for the company, Nordstrom said in a written statement Thursday, confirming an earlier Wall Street Journal report.
In response, Nordstrom formed a special committee of independent directors to evaluate their potential proposal, along with those of any other suitors. The special committee is working with bankers from Morgan Stanley and Centerview Partners.
There are no guarantees the current efforts will result in a transaction.
Nordstrom's shares have dropped roughly 50% over the past five years, giving the company a valuation of around $3 billion.
The shares jumped after the report and closed up more than 4% on Thursday.
The company has explored deals on and off for years, including in 2017 when the family tried to take the retailer private with a group that included the private-equity firm Leonard Green & Partners. Those talks ended less than a year later, after the board rejected their offer as too low.
Nordstrom family insiders control roughly 30% of the company's shares. Another significant owner is El Puerto de Liverpool SAB, which operates high-end department stores in Mexico and bought a 9.9% stake in the business in 2022.
Erik Nordstrom was named sole CEO of the company in March 2020. He previously shared the co-president role with his brother, Pete. (A third brother, Blake, who also had been co-president, died in 2019 of lymphoma.)
A group of investors in December offered $5.8 billion to buy Macy's, partly attracted by its real-estate holdings. The investors, Arkhouse Management and Brigade Capital Management, later raised their offer to $6.6 billion and have been working on due diligence.
Big-box retailer Kohl's was also in talks to sell itself to the owner of the Vitamin Shoppe, but the deal collapsed in 2022.
Nordstrom's sales have declined in recent quarters, partly due to the closure of its Canadian business. Nordstrom operates more than 350 stores in total.
Last month, the company offered up a weaker-than-expected outlook for the current year. Nordstrom said consumers are still being cautious with discretionary spending, with one bright spot being an industrywide pullback in deep discounting, which could help lift profits.
Erik Nordstrom said the company is focused on increasing online sales and opening more of its off-price Nordstrom Rack locations in the coming years.
--Suzanne Kapner contributed to this article.
Write to Lauren Thomas at lauren.thomas@wsj.com
(END) Dow Jones Newswires
April 18, 2024 16:36 ET (20:36 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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