2) Nordstrom family ends its buyout effort, which was meant to take the retailer private and focus on long-term growth.

What happened

  • The termination of the Nordstrom family’s buyout effort puts to rest two years of deliberations with the department store’s board. The two parties could not reach an agreement on the price: In February 2018, the board rejected the family’s $8 billion offer—the buyout group had offered $50 a share, which at the time was under Nordstrom’s closing price. The group planned to buy 21% of the family’s current stake, which would have yielded the family $550 million.

Why it matters

  • Nordstrom, founded in 1901, is one of the only department stores that remains under family management—the family owns almost one-third of the stock. Even so, the company is still public, subjecting it to significant pressure as it looks to reimagine its identity. The buyout group sought to take the company private, believing it would give Nordstrom more flexibility to “navigate a challenging retail landscape.”
  • Though Nordstrom shares have grown 16% in the past year—linked to Nordstrom’s integration of digital tools and expansion of its ecommerce operations—the family’s decision to end its buyout negotiations means the company will be relegated to answering to investors instead of freeing the department store up to transform the Nordstrom retail experience in the long term. Given that most other department stores are public, buying out Nordstrom would have given it a leg up at a time when department store retail is struggling against falling foot traffic and the resulting lower sales.
  • Additionally, as Nordstrom continues expanding its off-price Rack brand, which is driving sales but lowering margins and attracting cheaper customers, the continued public pressure might force the company to continue pushing this strategy forward, which is problematic long-term.