Nordstrom family to take company private(bloomberg.com)
bloomberg.com
Nordstrom family to take company private
https://www.bloomberg.com/news/articles/2024-12-23/nordstrom-family-to-take-company-private-in-6-25-billion-deal
102 comments
https://archive.ph/a1nu4
I hope this doesn't change Nordstrom too much. One of the last department stores worth stopping into. JC Penny and Macys feel so run down (and I'm talking a nice Southern California mall, not one somewhere in the middle of the country). Bloomingdales is nice too, but they don't seem like they'll have the same staying power.
I hope this actually does change Nordstrom because their corporate direction has been terrible over the last few years while trying to maximize shareholder value.
They’ve closed all Canadian operations, despite their Vancouver store being one of their highest earning stores in North America. They’ve closed several west coast stores in the US as well, citing crime but insiders had said it was because they want to move into lower cost areas instead.
Basically they’re trying to move into the market that JC Penny and Macy are leaving open, which has been slowly making Nordstrom itself much lower quality as a shopping experience.
Over the last few years they’ve turned their shopping experience into more of a dumping ground of random clutter
Perhaps going private will let them focus on treating their experience as part of the product.
They’ve closed all Canadian operations, despite their Vancouver store being one of their highest earning stores in North America. They’ve closed several west coast stores in the US as well, citing crime but insiders had said it was because they want to move into lower cost areas instead.
Basically they’re trying to move into the market that JC Penny and Macy are leaving open, which has been slowly making Nordstrom itself much lower quality as a shopping experience.
Over the last few years they’ve turned their shopping experience into more of a dumping ground of random clutter
Perhaps going private will let them focus on treating their experience as part of the product.
The retail death spiral.
Sales are down, so they cut costs by cutting staff and presentation. That ultimately turns the store into a warehouse of goods which in turn discourages shopping further. With that decline they often resort into cutting store operating hours which further kills off shopping.
One of my local malls is open from like 11am to 6pm on the weekdays and 8pm on the weekends. Even if I wanted to shop there, it's hard because they are closed during normal work hours. The shops and stores are all manned with a skeleton crew. I've seen Macy's have a single employee manning the entire store.
Sales are down, so they cut costs by cutting staff and presentation. That ultimately turns the store into a warehouse of goods which in turn discourages shopping further. With that decline they often resort into cutting store operating hours which further kills off shopping.
One of my local malls is open from like 11am to 6pm on the weekdays and 8pm on the weekends. Even if I wanted to shop there, it's hard because they are closed during normal work hours. The shops and stores are all manned with a skeleton crew. I've seen Macy's have a single employee manning the entire store.
When companies go public - it’s no longer about running the store/company well or efficiently. It is an extractive process as much as possible at least in the last 20 years. Public companies think quarter to quarter and no longer think long term. Only smaller private companies are able to invest in the long run and invest in the future. The only group of public companies are that can swim against this tide are the tech darling like intel, apple, Microsoft, google.
I worry that the corporate quarter to quarter mentality is ruining American corporation that is taking American capitalism to a new low.
Maybe Nordstrom has a chance if they are private in the long run.
I worry that the corporate quarter to quarter mentality is ruining American corporation that is taking American capitalism to a new low.
Maybe Nordstrom has a chance if they are private in the long run.
> "tech darling like intel"
I guess you haven't looked at INTC stock price recently? As of yesterday's close on 2024-12-23 it's essentially unchanged from where it was 30 years ago. If you factor in inflation (which you should) it's actually lost 50% of its value over that time period.
Apple, Microsoft and Google are different animals.
I guess you haven't looked at INTC stock price recently? As of yesterday's close on 2024-12-23 it's essentially unchanged from where it was 30 years ago. If you factor in inflation (which you should) it's actually lost 50% of its value over that time period.
Apple, Microsoft and Google are different animals.
[deleted]
As a male with absolutely no fashion sense but an occasional need to look presentable, I’ve always appreciated that you can get a free appointment with a personal stylist to help select your wardrobe. The cost is of course baked into the price of the clothing, but it is going to be quality stuff that lasts for a long time and be comfortable.
Saks used to have a men's store in San Francisco where you could just get a guy to dress you. Barney's men's department was good, too. Unfortunately these are long gone. There is an overall lack of places for a man to buy clothes in American cities. I've noticed when I am abroad there seem to be more.
> I've noticed when I am abroad there seem to be more.
My experience in Europe has been that the men’s clothing department is, at most, 20% of the store space. Alongside multiple floors dedicated to women’s clothing.
My experience in Europe has been that the men’s clothing department is, at most, 20% of the store space. Alongside multiple floors dedicated to women’s clothing.
Bonobos has guide stores with stylists in them. If you need that kind of clothing it can work out pretty well. It's a completely different price range to Saks though.
I'm a bit skeptical that a department store was ever a great option for that, Maybe once upon a time. Aside from a one shop tailor, I'd look to small chains oriented around men's clothing like J Banks, J Press, and so forth at this point.
This is some really solid advice, thanks Buildsjets. I'm gonna give this a try sometime.
Seconded, the stylists really take care of you.
An underappreciated upside of having a partner with fashion sense.
we need a Nordstrom rep with fashion sense to help us acquire a partner with fashion sense (also sometimes the partner with fashion sense thinks flashy branded things are handsome instead of marine layer clothes)
I worked at Nordstrom for 8 years, first in customer service, then in IT, then in engineering. I think this is a good move. The Nordstrom family cared a lot about the brand and the customers, the shareholders didn't. Things were really going downhill when I left. I hope they can get the boat righted.
I think it’s a positive. Generally the founders are more customer friendly/focused than CEO’s chasing constant revenue/profit growth.
Hard to imagine such a customer friendly company drastically changing when the founders retake control.
Hard to imagine such a customer friendly company drastically changing when the founders retake control.
Seemed to work pretty well for Dell Computer.
The Walton family disproves that theory.
Does it? Remember when Walmart sold made in the USA products exclusively? Hint: It was before Sam Walton died.
That is the point. The heirs have ruined the business by pissing on the founder's grave.
I don’t think you’d see them taking Walmart private and putting their money on the line to improve the business.
We have one of the new concept Penny's here in Hurst Texas, and its amazing, the store is very well merchandised, clean and well lit.
They're supposedly rolling them out nationwide - JCP does gamify shopping in a way that almost makes it fun.
https://fortworth.culturemap.com/news/fashion/11-01-19-j-c-p...
https://www.jcpenney.com/m/hurst-store-page
They're supposedly rolling them out nationwide - JCP does gamify shopping in a way that almost makes it fun.
https://fortworth.culturemap.com/news/fashion/11-01-19-j-c-p...
https://www.jcpenney.com/m/hurst-store-page
WOW do I love their new logo. This all seems really well thought out. Glad they're doing the hard work to step out of the 90s!
which one, I searched and found several iterations that are supposedly "new"
This sounds really interesting - they've decided to make their new stores a place to visit not just to shop but as a place to learn (clearly leading to more shopping).
Stores used to rely on other mall properties to do the 2nd part but as the concept of the Mall starts fading, they need to start doing this themselves.
Stores used to rely on other mall properties to do the 2nd part but as the concept of the Mall starts fading, they need to start doing this themselves.
That's good. For nostalgia reasons I shop at the mall around the holidays. JCP seems to be marching right behind the SEARS that is no longer there.
I happen to have some inside knowledge, this was a concept store created for a specific marketing campaign and no intention of this being rolled out further to their stores. The store/campaign itself was like three waves of executives ago at this point and will likely never be more than this single store. They were experimenting with box in a box but have mostly lost those partnerships too, the Sephora partnership was largely seen as beneficial to Sephora more than JCP.
Thats really too bad, it makes shopping so pleasant.
I know Penny's has opened new stores, it looks like they learned the right lessons from this store though, better merchandising, more lighting, etc.
I know Penny's has opened new stores, it looks like they learned the right lessons from this store though, better merchandising, more lighting, etc.
Wow, it's like an Apple store but it opened six years after JCP fired the CEO they headhunted from Apple retail. And the CEO mentioned in the article has already been replaced.
Nordstrom played really smart - they didn't overexpand or cheap out their brand.
They had the failed Canada expansion, but they smelled like roses compared to the crash and burn of Target Canada.
On top of the hilariously mismanaged rollout and botched logistics/inventory system, Target thought that Canadians would pay $19 for a $5 tee when the exchange rate was ~1.04.
It’s unfortunate. As mentioned elsewhere, the Vancouver store was one of their most profitable (overall) but the rest were not - and I guess sustaining operations in another country for one store doesn’t work out.
6 months after the grand opening the east coast locations looked as if they were being liquidated not ramping up. To hide the fact that they couldn’t get the inventory mix they needed the staff were spacing out what little they did have. E.g. An entire aisle of king sized duvets with huge empty gaps, and no twin or queen sized to be found.
Me too. Have to say -- I am not a big retail shopper, but my experiences at Nordstrom has been the best I have ever been too, including Apple store.
I bought the suit that I wore to my wedding form Nordstrom. The sales associate that helped me out did a fantastic job.
I bought the suit that I wore to my wedding form Nordstrom. The sales associate that helped me out did a fantastic job.
> and I'm talking a nice Southern California mall, not one somewhere in the middle of the country
This isn't the bound you seem to think it is. SoCal is quite wealthy, but the workers aren't exactly motivated or caring. I remember going keyboard shopping at Fry's well before any talk of bankruptcy and the whole aisle was basically a pile of scattered keycaps and nearly-empty keyboards. And I was just in a Macy's the other day (not in SoCal), and actually remarked how nice the store was set up compared to the overall trend of everywhere else going down hill. So as usual, YMMV.
This isn't the bound you seem to think it is. SoCal is quite wealthy, but the workers aren't exactly motivated or caring. I remember going keyboard shopping at Fry's well before any talk of bankruptcy and the whole aisle was basically a pile of scattered keycaps and nearly-empty keyboards. And I was just in a Macy's the other day (not in SoCal), and actually remarked how nice the store was set up compared to the overall trend of everywhere else going down hill. So as usual, YMMV.
Dillards isn't bad, and at least seems to have a better selection than Macy's. They are a bit pushy in terms of sales though, and they don't seem to do a good job at customizing their selection regionally (the amount of winter coats and thick sweaters I've seen at Dillard's is absolutely comical for Houston locations)
Respectfully disagree. I feel like quality and selection at most Nordstroms I’ve been to recently has been much worse. Salespeople have been less knowledgeable and more pushy. Feels like they’ve moved from upmarket into a space more easily replaced by lower cost online competitors.
I used to grab coffee in Toronto's Nordstrom cafe. The store was positioned so that you had to cross it after getting out of the subway on your way to other stores and offices—as prime of a location as it gets. It still got tanked by the rent
My local Macy's is pretty nice, so I shop there pretty regularly. It's in the middle of the country, but it's also located in a relatively affluent area and attached to a mall that's still doing quite well.
> and I'm talking a nice Southern California mall, not one somewhere in the middle of the country
You do realize that all the best maintained malls are in the middle of the country right? :)
Mall of America is about as middle as it gets.
You do realize that all the best maintained malls are in the middle of the country right? :)
Mall of America is about as middle as it gets.
I mean, of course Nordstroms feels less run down than JC Penny. Everything costs 10x.
> Nordstrom Inc. is going private in an all-cash transaction valued at about $6.25 billion in a bet by the founding family that the department-store company will be more successful without the scrutiny and demands of the public market.
> As part of the transaction, the family will acquire all of the outstanding common shares of Nordstrom not already beneficially owned by the Nordstrom Family and Mexican department store chain El Puerto de Liverpool SAB.
> Under the terms of the agreement, Nordstrom common shareholders will receive $24.25 in cash for each share of Nordstrom common stock they hold. The Nordstrom Family will have a majority ownership stake in the company.
- https://archive.is/soEKw
> As part of the transaction, the family will acquire all of the outstanding common shares of Nordstrom not already beneficially owned by the Nordstrom Family and Mexican department store chain El Puerto de Liverpool SAB.
> Under the terms of the agreement, Nordstrom common shareholders will receive $24.25 in cash for each share of Nordstrom common stock they hold. The Nordstrom Family will have a majority ownership stake in the company.
- https://archive.is/soEKw
What happens if I don't want to sell my shares? I don't understand how that works.
A vote by the majority of the shareholders will determine what happens.
If you don’t want to sell your shares, prepare to convince a majority of the shareholders otherwise.
This will be very hard since 45% of the company is owned by the people making the buyout offer.
If you don’t want to sell your shares, prepare to convince a majority of the shareholders otherwise.
This will be very hard since 45% of the company is owned by the people making the buyout offer.
There are drag along clauses or forced buyout clauses of public shares.
You should probably know these things before choosing to invest in the stock market.
The TL;DR of it is that your shares will be sold for you, and money will be deposited into your account. As a "common" shareholder, you don't get a choice in the matter (I mean, you can "vote", but common share votes aren't worth the email they're printed on).
The TL;DR of it is that your shares will be sold for you, and money will be deposited into your account. As a "common" shareholder, you don't get a choice in the matter (I mean, you can "vote", but common share votes aren't worth the email they're printed on).
This is one of many reasons I do not invest directly in stocks. I have enough b.s. to think about in my day to day life.
Index funds for the win, I guess.
Index funds for the win, I guess.
You’re a common shareholder
You never know on HN. Perhaps their last name is Nordstrom.
Interesting. I have seen large scale department stores like Nordstrom die one after another. Nordstrom Canada actually failed a few years ago. I am not sure if I was rich and owned Nordstrom in some way, I would invest my own money into Nordstrom. Instead I would do everything I can to diversify.
I don't think department stores are failing because they're a bad business. I think they're failing because they're being gutted by corporate raiders for their real estate assets.
I disagree, I think they are bad business.
I have come to absolutely detest online shopping. I have to return so much stuff, live with so many things that I don't actually love, generate sooooo much trash, and spend hours on hours researching everything because I can't hold it in my hand.
Then I walk into REI and ask them if I can try on a size 9 wide of a running shoe. They tell me they don't have it, so I ask them if they have any wide... they don't have a single wide shoe. Then I ask what they have and they say "Ohh we have 200 of the exact same shoe in the exact same size in stock"
And then I go order 5 different 9-wide shoes on amazon and return 4....
I have come to absolutely detest online shopping. I have to return so much stuff, live with so many things that I don't actually love, generate sooooo much trash, and spend hours on hours researching everything because I can't hold it in my hand.
Then I walk into REI and ask them if I can try on a size 9 wide of a running shoe. They tell me they don't have it, so I ask them if they have any wide... they don't have a single wide shoe. Then I ask what they have and they say "Ohh we have 200 of the exact same shoe in the exact same size in stock"
And then I go order 5 different 9-wide shoes on amazon and return 4....
Have you shopped at Nordstroms and do you have money? Here's how Nordstroms won me over back when I was in a better economic class than I am today:
My daughter had a speech impediment and other issues that caused her to not feel great about herself. Little girls can be scarily mean and self organize pecking orders of meanness in some way based on self confidence which my daughter didn't have. The women at Nordstroms made her feel like a princess and made her feel good about/have confidence in herself in a way that overruled the meanness from the girls in her class (sorry small town little miss, the fancy ladies at Nordstroms in the nearest big city overruled your opinions).
Nordies then every season called and let my wife know when new things came in, and held back items in my daughter's size and the next up for her to come try on, and then would just go get them when we came in. No 'oh we don't have that size'. When they know you daughters taste and name, have brought smiles to her face, and made her confident when running into other kids from her school when out and about where before she would want to run away, well, it makes you a customer for life (or until your life falls apart and finances no longer work).
Shopping therapy probably isn't the healthiest mentally, but Nordstroms was way cheaper than what we were already spending on speech therapy a year and 1000% better for my daughters opinion of herself. I would (and did) pay anything for that. Again, maybe not healthy and it wasn't intentional (we just went in originally to get her something fancy to wear on our fancy Christmas night out to dinner and The Nutcracker) but it was shockingly life changing for my little girl. I'll add that this endorsement of (probably gross) classist/capitalism consumer therapy is brought to you by someone raised by hippie parents in Santa Cruz.
My daughter had a speech impediment and other issues that caused her to not feel great about herself. Little girls can be scarily mean and self organize pecking orders of meanness in some way based on self confidence which my daughter didn't have. The women at Nordstroms made her feel like a princess and made her feel good about/have confidence in herself in a way that overruled the meanness from the girls in her class (sorry small town little miss, the fancy ladies at Nordstroms in the nearest big city overruled your opinions).
Nordies then every season called and let my wife know when new things came in, and held back items in my daughter's size and the next up for her to come try on, and then would just go get them when we came in. No 'oh we don't have that size'. When they know you daughters taste and name, have brought smiles to her face, and made her confident when running into other kids from her school when out and about where before she would want to run away, well, it makes you a customer for life (or until your life falls apart and finances no longer work).
Shopping therapy probably isn't the healthiest mentally, but Nordstroms was way cheaper than what we were already spending on speech therapy a year and 1000% better for my daughters opinion of herself. I would (and did) pay anything for that. Again, maybe not healthy and it wasn't intentional (we just went in originally to get her something fancy to wear on our fancy Christmas night out to dinner and The Nutcracker) but it was shockingly life changing for my little girl. I'll add that this endorsement of (probably gross) classist/capitalism consumer therapy is brought to you by someone raised by hippie parents in Santa Cruz.
Nordstrom is great for service!
You cannot go there and get bad service in my experience. Other department stores you will have to wait around, or go hunting for a sales associate who is likely so overwhelmed they can't really help you anyway.
Nordstroms keeps enough people around that you can frequently have what amounts to personal shopper service. Of course, you pay for it, but there are clearly consumers that are happy to pay that premium (myself included.
aside: I dated a girl who was missing one foot, and Nordstroms was rather famous in the amputee community for giving 50% discounts. Pretty slick PR move really.
You cannot go there and get bad service in my experience. Other department stores you will have to wait around, or go hunting for a sales associate who is likely so overwhelmed they can't really help you anyway.
Nordstroms keeps enough people around that you can frequently have what amounts to personal shopper service. Of course, you pay for it, but there are clearly consumers that are happy to pay that premium (myself included.
aside: I dated a girl who was missing one foot, and Nordstroms was rather famous in the amputee community for giving 50% discounts. Pretty slick PR move really.
> I have to return so much stuff, live with so many things that I don't actually love, generate sooooo much trash, and spend hours on hours researching everything because I can't hold it in my hand.
I hate the research part, especially Amazon hasn't improved their system since the late 2000s. I'm sure lots of great improvements on the logistics and business-development side, but the store feels like hobby project and "we couldn't make filtering work, so whatever".
But on the trash part: you generate visible trash. But if you frame it slightly differently: the mall you'd go to needs to be built and heated and fully staffed, and thousands of cars need to drive there etc etc, and that consumes a lot of resources. It's just not visible, and with online-shopping it is. But I'm pretty sure online-shopping is more efficient even if you have to return 4 out of 5 shoes.
I hate the research part, especially Amazon hasn't improved their system since the late 2000s. I'm sure lots of great improvements on the logistics and business-development side, but the store feels like hobby project and "we couldn't make filtering work, so whatever".
But on the trash part: you generate visible trash. But if you frame it slightly differently: the mall you'd go to needs to be built and heated and fully staffed, and thousands of cars need to drive there etc etc, and that consumes a lot of resources. It's just not visible, and with online-shopping it is. But I'm pretty sure online-shopping is more efficient even if you have to return 4 out of 5 shoes.
Didn't you see? Amazon improved it by putting the option to have an AI pick out the "best" of 2,000 identical items
Amazon is actively killing the usefulness of their store in a race to beat ali express and temu to the bottom
Amazon is actively killing the usefulness of their store in a race to beat ali express and temu to the bottom
> I hate the research part, especially Amazon hasn't improved their system since the late 2000s.
Pretty sure it's regressed. I think there used to be a bunch more filters you could do based on a product category that I think went away as they added more products.
Real annoying when you want like a 4 GB memory card and it splits up your input of "4 GB" into "4", "GB" and then shows you everything with a "4" or a "GB" in it...
Pretty sure it's regressed. I think there used to be a bunch more filters you could do based on a product category that I think went away as they added more products.
Real annoying when you want like a 4 GB memory card and it splits up your input of "4 GB" into "4", "GB" and then shows you everything with a "4" or a "GB" in it...
> Real annoying when you want like a 4 GB memory card and it splits up your input of "4 GB" into "4", "GB" and then shows you everything with a "4" or a "GB" in it...
I'm still not convinced it's not a social experiment to find out just how much it will take to make users give up and go away.
Or the size filter on clothes. Great, I can filter by size to only see pants that'll fit me. Wow, nice selection, let's open this one. Ohh... it has that size in general but it isn't available. I've come this to just writing a scraper, getting all the data and then filtering it properly just so I can buy some pants.
I'm still not convinced it's not a social experiment to find out just how much it will take to make users give up and go away.
Or the size filter on clothes. Great, I can filter by size to only see pants that'll fit me. Wow, nice selection, let's open this one. Ohh... it has that size in general but it isn't available. I've come this to just writing a scraper, getting all the data and then filtering it properly just so I can buy some pants.
> the mall you'd go to needs to be built and heated and fully staffed, and thousands of cars need to drive there etc etc
And that isn't the case with the logistics for fulfilment centers and storage scattered all over the place? Just not visible to you, but as per your example times 4, which wouldn't be the case if you get something that fits at the first try.
And that isn't the case with the logistics for fulfilment centers and storage scattered all over the place? Just not visible to you, but as per your example times 4, which wouldn't be the case if you get something that fits at the first try.
> and "we couldn't make filtering work, so whatever".
They actively _do not_ want you to be able to find what you need, that would mean you don't look at their ads.
They actively _do not_ want you to be able to find what you need, that would mean you don't look at their ads.
> I have to return so much stuff, live with so many things that I don't actually love, … and spend hours on hours researching everything because I can't hold it in my hand.
i’ve basically stopped shopping online for these exact reasons. including my entire Christmas shopping list, all bought in actual stores.
- the amount of time researching what i was buying online was beyond ridiculous
- the colors or size or material was just plain wrong or misleading more than it was correct
- after all of the research, i would still end up returning so much of it.
over the past year i just save all that time and frustration and just go to the store, hold the thing, and buy it. done. so much easier.
i can’t stress how much i detest the dishonesty and misleading garbage of online stores.
i’ve basically stopped shopping online for these exact reasons. including my entire Christmas shopping list, all bought in actual stores.
- the amount of time researching what i was buying online was beyond ridiculous
- the colors or size or material was just plain wrong or misleading more than it was correct
- after all of the research, i would still end up returning so much of it.
over the past year i just save all that time and frustration and just go to the store, hold the thing, and buy it. done. so much easier.
i can’t stress how much i detest the dishonesty and misleading garbage of online stores.
I understand this in part is an issue with the fashion industry. AFAIK you might order 100 green S, 100 red M and you get 150 blue L and 50 red M (simplified example). Haven't done anything related to this in over ten years though. Things might have gotten better and depend on your scale/leverage.
> I disagree, I think they are bad business.
Your personal experience not withstanding: Nordstroms most recent financial statements indicates that they pulled in ~$150mm on $15b in sales for the past few years. That seems like a pretty healthy business to me.
Your personal experience not withstanding: Nordstroms most recent financial statements indicates that they pulled in ~$150mm on $15b in sales for the past few years. That seems like a pretty healthy business to me.
Consider yourself lucky. My feet are not just wide. I wear 10.5 size and have high arches.
Shoe twin, lay me a trail of breadcrumbs to follow (I actually do wear New Balance as per the comments below)
isn't New Balance known for wide shoe sizes?
Yes, but the nearby stores that stock them might only carry the popular sizes and models. New Balance does offer some locations with complete shoe fittings and unique size ordering, but their closest location may be hours away. Sometimes a trip to the website is the only option, but it's tough to fit a shoe on a foot in a virtual setting. :)
If they cannot generate enough profits to even justify holding on to the real estate rather than putting the real estate to some other use, is that meaningfully different from failing?
Anecdotally, but it seems like a lot of these sites that once hosted these department or big box stores don't wind up getting redeveloped. At best, they might be home to a Spirit Halloween for a couple months out of a year. Having to compete with online retailers is certainly a challenge, but it doesn't seem like what private equity does to these legacy companies benefits anyone but their investors' desire for short-term profits.
[deleted]
Many private equity firms are perfectly happy to extract cash from viable businesses and bankrupt them. They have an asset, and they want to convert it to some other kind of asset. It often has very little to do with whether the business is failing.
Essentially, it's arbitrage. "Can be arbitraged" is not the same as failing. You can talk about things like "efficiency", but the problem with that is that the metric being used to measure efficiency is laughably simplistic - deliberately so, it's just a way to justify socially irresponsible behavior.
Essentially, it's arbitrage. "Can be arbitraged" is not the same as failing. You can talk about things like "efficiency", but the problem with that is that the metric being used to measure efficiency is laughably simplistic - deliberately so, it's just a way to justify socially irresponsible behavior.
Yep. The department store model still makes sense in Nordstrom's target price bracket. The whole point of a physical store in the 21st century is that it can provide a hands-on, in-person experience that an online store can't. Nordstrom sells premium products where that kind of experience is worthwhile.
I don't need a physical store to compare two different 6-foot USB cables. I do need a physical store for a suit, or a nice pair of shoes, or cologne.
I don't need a physical store to compare two different 6-foot USB cables. I do need a physical store for a suit, or a nice pair of shoes, or cologne.
> I don't need a physical store to compare two different 6-foot USB cables.
i’ve had the opposite experience. the number of times i’ve received knockoff usb cables is crazy. or misleading specs from their amazon “store” pages, cables that just die in a week, usb charging bricks that don’t have the charging power they claim, etc…
sure, amazon exchanged them, but at that point the convenience of ordering online has gone up in smoke.
haven’t had the same problem if i just buy a cable from the local camera shops where they’ve vetted which cables they carry. buy it and it just works.
i’ve had the opposite experience. the number of times i’ve received knockoff usb cables is crazy. or misleading specs from their amazon “store” pages, cables that just die in a week, usb charging bricks that don’t have the charging power they claim, etc…
sure, amazon exchanged them, but at that point the convenience of ordering online has gone up in smoke.
haven’t had the same problem if i just buy a cable from the local camera shops where they’ve vetted which cables they carry. buy it and it just works.
Huh, I've had much better luck, often buying from shadier places. I've bought a couple dozen cables from $CHINESE_RETAILER and they've all met the listed speed/power specs. I like to think I have an eye for spotting the passable items in an ocean of dropshipped sludge, but I'm not omnipotent. I do have an American brand that I'll order cables from if my money isn't paying for it.
And that's the reason they're being gutted. They're not crazy growth businesses anymore but have enough cash flow and real estate to make it profitable to be bled to death by these vultures.
Also, the way that Macy’s leadership talks about the business and the merger’s they’ve pursued, they consider the business to be a “toll bridge”, where they are the only large scale department store in America and thus if you want certain premium fashion goods to have distribution throughout the United States, you have to sell to them in a way that they can generate a profit.
They don’t seem to care about the customer at all and there stores are very rundown and not well maintained. It doesn’t feel like a luxury. They seem focused on selling premium fashion brands on their distribution network with location numbers. They don’t care about anything else.
They don’t seem to care about the customer at all and there stores are very rundown and not well maintained. It doesn’t feel like a luxury. They seem focused on selling premium fashion brands on their distribution network with location numbers. They don’t care about anything else.
Corporate raiders only targeted "distressed assets". They didn't pay full-price for healthy brands to gut - the whole point was to flip cheap (failing) stores.
Their goal is a quick profit. That can be a failing business but it can also be a business which isn’t as profitable as Wall Street investors want and has salable assets. The debate between short term and long term value is a famous example of how priorities shift based on the investors’ timeframe.
If a business’s assets are more valuable than the business itself, it’s a bad business.
On a short enough time frame, the golden egg currently inside the goose is more valuable than the goose itself. The problem comes when you kill the long-term profits trying to get an immediate return.
Thinking you can make more money in the short term (for example, by selling real estate) routinely kills the ability to earn a profit long term (which is now eaten by rent on land you used to own).
Thinking you can make more money in the short term (for example, by selling real estate) routinely kills the ability to earn a profit long term (which is now eaten by rent on land you used to own).
> I don't think department stores are failing because they're a bad business. I think they're failing because they're being gutted by corporate raiders for their real estate assets.
I think you are confusing cause and effect at least the case I know of, Sears. Because Sears' core business was dying, because of Amazon, the best way to get value out of it was to raid its real-estate assets. It may have hastened Sears' demise, but it probably was the smartest thing to do from a business standpoint.
I think you are confusing cause and effect at least the case I know of, Sears. Because Sears' core business was dying, because of Amazon, the best way to get value out of it was to raid its real-estate assets. It may have hastened Sears' demise, but it probably was the smartest thing to do from a business standpoint.
A lot of people imagine that private equity etc. is scooping up successful businesses and running then into the ground. A company like Sears was a confused mess when they were bought.
Nordstrom has been pretty steady as-is though. It's still one of the few brick and mortar stores I actually go to.
Also, their online shopping is pretty solid as well. I always use them for gifts. I think they buffed it up during the pandemic and its paid dividends.
Also, their online shopping is pretty solid as well. I always use them for gifts. I think they buffed it up during the pandemic and its paid dividends.
The only time I will set foot in a mall is to go get a new suit/jacket or something at Nordstrom. It's at the nice halfway point between the slop and Neimans and they can turn it around same day for $25.
>Nordstrom Canada failed
Of the 13 stores they opened in canada, 7 were the "nordstrom rack" discount brand, which is really not nordstrom. IIRC they were actually some of the old stores from the failed Target expansion, and they felt like failed Target stores. It's not a surprise that they failed.
Of the 13 stores they opened in canada, 7 were the "nordstrom rack" discount brand, which is really not nordstrom. IIRC they were actually some of the old stores from the failed Target expansion, and they felt like failed Target stores. It's not a surprise that they failed.
> Of the 13 stores they opened in canada, 7 were the "nordstrom rack" discount brand, which is really not nordstrom
Though it's not like these all served different geographic markets - e.g. My local Nordstrom Rack was a 10 minute drive from my local Nordstrom.
FWIW my local Nordstrom Rack was an old Future Shop location. Now it's a Marshalls.
Though it's not like these all served different geographic markets - e.g. My local Nordstrom Rack was a 10 minute drive from my local Nordstrom.
FWIW my local Nordstrom Rack was an old Future Shop location. Now it's a Marshalls.
If they can go back to their roots with digital, maybe. They would need to figure out how to do a "ssense + crate and barrel + sephora" under one online banner property. As far as I can think, nobody has really nailed the high end department store online have they?
Would that work online? A lot of these goods I want to see in person and ideally touch before purchase
I think it would be best served coupled, so their physical locations would basically turn into try-on/look at only mostly, kinda like early wably parker stores? the IRL stuff would be thin layer retail, experiences, coffee shop etc, but you would mostly buy, buy, buy again online. I think it could work if it was well executed!
Revenue: ~$15B
Profit: ~$0.3B
0.3B / 6.25B = ~5% which is pretty good. If they can boost it somehow then even better.
Any suggested reading to understand how these transactions work in practical terms? Does it depend on some sort of rules of the exchange or SEC rules?
E.g. How do existing shareholders get paid out? What happens to shorts? Treasury shares? Options? RSUs?
It seems like it would be extremely complex.
E.g. How do existing shareholders get paid out? What happens to shorts? Treasury shares? Options? RSUs?
It seems like it would be extremely complex.
Source: I worked at Blizzard and held Blizzard stock during the Activision merger, and then held ATVI stock during the Microsoft acquisition. Also a close friend of mine worked at Spunk during the Cisco acquisition.
One of two things happen: a stock-for-stock exchange at a ratio (like 2 Blizzard becomes 1 ATVI stock), or a complete buyout and liquidation of the acquired company's stock.
In the latter, you are basically sent a check based on the sale price agreed upon by the two companies. In the case of Nordstrom, shareholders receive $24.25 for each unit of stock they hold. The downside is you pay capital gains on it. In the case of my friend at Splunk, she is left with a horrifying tax bill that'll be in the upper-5 to lower-6 figures.
What also happens is once the share price is agreed upon, the stock is priced in. As a result there is little point in shorting as the stock's price moves very little.
One of two things happen: a stock-for-stock exchange at a ratio (like 2 Blizzard becomes 1 ATVI stock), or a complete buyout and liquidation of the acquired company's stock.
In the latter, you are basically sent a check based on the sale price agreed upon by the two companies. In the case of Nordstrom, shareholders receive $24.25 for each unit of stock they hold. The downside is you pay capital gains on it. In the case of my friend at Splunk, she is left with a horrifying tax bill that'll be in the upper-5 to lower-6 figures.
What also happens is once the share price is agreed upon, the stock is priced in. As a result there is little point in shorting as the stock's price moves very little.
> she is left with a horrifying tax bill that'll be in the upper-5 to lower-6 figures.
Isn't that because she was written a check well into the 6-figures?
Isn't that because she was written a check well into the 6-figures?
Their real estate portfolio is at least 1-2B, w/ 2B in debt, they are buying the business at a ratio of 20 P/E.
Will be interesting to see how they do privately, good luck to them!
Will be interesting to see how they do privately, good luck to them!
I keep reading that in the way prof. Farnsworth yells "Wernstrom!" in Futurama