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Nordstrom Family Could Take Chain Private

Nordstrom announced Thursday that some members of the family are exploring the possibility of taking the retailer private.

A new group has been formed by Co-Presidents Blake W. Nordstrom, Peter E. Nordstrom, and Erik B. Nordstrom, President of Stores James F. Nordstrom, Chairman Emeritus Bruce A. Nordstrom, and Anne E. Gittinger to explore the possibility of a “’going private transaction’ involving the acquisition by the group of 100% of the outstanding shares of common stock of the company.” In an Securities and Exchange Commission filing, the company cited the “changing dynamics in the retail environment” as impetus for this development.

The group members currently hold approximately 30 percent of Nordstrom stock.

The Nordstrom board has formed a special committee to act on behalf of the retailer. Centerview Partners LLC and Sidley Austin LLP have been retained as the financial and legal advisors, respectively. The committee has agreed to certain standstill provisions that would prevent it from specific actions between now and the end of January 2019.

Erich Joachimsthaler, chief executive of consulting firm Vivaldi, told Reuters the move could be motivated by a need for more flexibility to restructure as necessary, which is challenging for public entities.

While comparable store sales were down by 2.8 percent for full-line stores in the first quarter, the results were better than many of its peers and cushioned by a 2.3 percent uptick in off-price same store sales. Sales for off-price and online were up 8.7 percent collectively during the quarter.

In fact, the company credits its ability to weather the recent retail maelstrom to its decision to diversify from a primarily mall-based retailer. The company’s focus on off-price and e-commerce have served it well. Nordstrom now does roughly a quarter of its business online, while e-commerce represented only 5 percent of business 10 years ago.

It’s off-price business, which includes HauteLook, which it acquired in 2011, and Nordstrom Rack account for 30 percent of sales. And these avenues act as the biggest magnet for new, younger customers.

Shoppers have long lauded Nordstrom for its service, placing it at the top of several brand loyalty rankings, include a recent listing from Market Force Information, which also saw the retailer topping the list of stores with the best atmosphere and value for the money.

The retailer launched in 1901 as a shoe store Seattle and today operates 354 locations in 40 states.