Get 40% Off
💰 Buffett reveals a $6.7B stake in Chubb. Copy the full portfolio for FREE with InvestingPro’s Stock Ideas toolCopy Portfolio

Buyout firm Sycamore vies to take Nordstrom private, sources say

Published 05/02/2024, 03:49 PM
Updated 05/03/2024, 09:31 AM
© Reuters. FILE PHOTO: The Nordstrom store is pictured in Broomfield, Colorado, February 23, 2017.REUTERS/Rick Wilking/File Photo
JWN
-

(This May 2 story has been refiled to add the dropped word 'operator' in paragraph 1)

By Anirban Sen

NEW YORK (Reuters) - Sycamore Partners is one of the buyout equity firms that have expressed interest in taking U.S. department store operator Nordstrom (NYSE:JWN) private, according to people familiar with the matter.

Nordstrom said last month that CEO Erik Nordstrom and his brother Pete, the company's president, were exploring options to take the retailer private, confirming a Reuters report that had been published in March.

Negotiations will take several weeks and there is no certainty that Sycamore, which owns regional U.S. department store operator Belk, or any other private equity suitor will reach a deal, the sources said, requesting anonymity because the matter is confidential.

Sycamore declined to comment while representatives for Nordstrom did not immediately respond to a request for comment.

Nordstrom shares rose 6% to $19.90 in afternoon trading on the New York Stock Exchange on Thursday on the news, giving the company a market value of about $3.3 billion. Nordstrom also had long-term debt of $2.9 billion as of the end of December.

Nordstrom and other U.S. retailers have been grappling with curbs on discretionary spending by consumers following a bout of inflation and high interest rates. Macy's Inc (NYSE:M), another department store operator, has also become a takeover target.

Nordstrom has more than 350 stores as well as e-commerce operations. Chief Executive Erik Nordstrom and other members of the Nordstrom family collectively own about a 30% stake in the Seattle-based company.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Nordstrom formed a special board committee in 2017 to consider a bid by the family to go private and explored a deal with several private equity firms, including Leonard Green. The special committee in 2018 turned down an $8.4-billion offer as inadequate.

Since then, Erik and Pete Nordstrom have raised their stake in the company from below 5% to 9.5%. The company has agreed to make any deal subject to approval by a majority of the unaffiliated shareholders.

New York-based Sycamore acquired Belk, which has nearly 300 Belk stores in 16 U.S. southeastern states, from members of its founding family in 2015 for $3 billion. It restructured Belk's debt in 2021 following the downturn in the sector during the COVID-19 pandemic, but it retained majority control.

Sycamore also considered purchasing other department store operators in the past, including Kohl's Corp (NYSE:KSS).

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.