Nordstrom Shares Gain As It Weighs Going Private

Shares of upscale department store chain Nordstrom surged Thursday after it announced it was weighing the possibility of taking the company private.

As the retail sector faces major upheaval and falling share prices due to the growth of e-commerce, Nordstrom announced it had formed a special committee and hired legal and financial advisors to look into the option of delisting from the stock exchange.

The committee will “explore the possibility of a pursuing a going private transaction,” Nordstrom said in a news release.

Going private could allow the chain to reorganize outside the glare of public markets and the pressures of releasing quarterly earnings reports, and at a relative bargain price given the decline in the share price in recent years.

Shares were up 10.3 percent in afternoon trading at $44.64 on the news. But the stock has lost about 40 percent over the last two years as the e-commerce juggernaut has gained momentum, threatening brick-and-mortar stores.

Though analysts have praised the chain as better run than some of its competitors, their share price has suffered with the entire sector.

Founded in 1901 in Seattle, Nordstrom is far smaller than rival department stores Macy’s and JC Penney, both of which have announced store closures as the growth of online shopping cuts into mall traffic.

Nordstrom also tends to attract a wealthier clientele compared with other department store chains, although it has also expanded its network of discount “Nordstrom Rack” stores.

Still, the chain has not been immune to the broader pressures in retail that have squeezed profit margins as conventional and online names like Amazon spar over customers. The chain’s profits in 2016 fell 41 percent to $354 million.

Nordstrom family members have a combined stake of about 30 percent and dominate the company’s leadership, with brothers Blake, Erik and Peter Nordstrom serving as co-presidents.

Nordstrom became an unwitting target or President Donald Trump earlier this year after it dropped his daughter Ivanka’s brands from its stores due to poor sales amid pressure from the anti-Trump “Grab Your Wallet” campaign.

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