Nordstrom Shelves Private Plans, For Now
The Nordstrom family has shelved its efforts to take the company private until after the holidays.
In June, members of the Nordstrom family — Co-Presidents Blake Nordstrom, Peter Nordstrom, and Erik Nordstrom, President of Stores James Nordstrom, Chairman Emeritus Bruce Nordstrom, and Anne Gittinger — formed the "Group" to pursue a transaction involving acquiring the approximately 70% of the Nordstrom, Inc. stock they don't already own.
Recently, reports have said the Nordstrom family was leaning toward a partnership with private equity firm Leonard Green to assist its bid to take the department store private. Reportedly the Group has been in talks with Leonard Green & Partners LP, Apollo Global Management LLC and KKR & Co LLP.
As department stores have come under pressure from shoppers moving online and to discount retailers, Nordstrom has continued to aggressively implement its digital strategy.
The retailer's online sales growth was up 27% for Nordstromrack.com and HauteLook, and up 20% for Nordstrom.com in its second quarter 2017. Nordstrom ended the quarter with a total sales growth of 3.5% and comp increase of 1.7%, which the retailer attributed to its digital businesses. Buy online, pick up in store sales also grew by roughly 50%.
Part of the department store's rollouts this year include the expansion of Nordstrom's "reserve online & try in store" service.The retailer plans to offer this feature in roughly 50 stores by the end of the year and announced currently it is expanding the service to four stores in the Chicago market, up from six in the Seattle area. According to Nordstrom around 80% of customers who try the service choose to shop this way again.
Nordstrom also just rolled out a new tiny store concept in Los Angeles in September. The 3,000-square-foot Nordstrom Local store has no dedicated inventory, but packs plenty of experiences. The store is a "neighborhood hub" where customers can access Nordstrom services, such as personal stylists who can transfer merchandise in for customers. Shoppers can also get alterations, a manicure, or just have online orders hand-delivered to their cars.
Nordstrom Local could be seen as the redefining of the brick-and-mortar version of this department store. The store has one styling suite and eight dressing rooms surrounding a central meeting space where customers can sit comfortably, enjoy a glass of wine or beer, and chat with their personal stylists.
A Nordstrom personal stylist can help customers with fashion advice, finding a gift or developing a whole new wardrobe. Stylists and salespeople have a new digital tool, Nordstrom Style Boards, which allow them to create digital boards filled with personalized fashion recommendations, like a summer vacation or wedding, which customers can view on their phone and purchase directly through Nordstrom.com.
"Customers like having more ability to shop on their terms," said James Nordstrom, president of stores, in August. "The store plays a huge role in that, and they're really important. And they're going to be the hub of a lot of the things that we do over time, which is why we want to continue investing in our most important markets."