Shares of luxury department store chain Nordstrom, Inc. (NYSE:JWN) were up 5.8% close to the noon hour on September 13. News broke the previous day that the family-owned company is nearing a deal with private equity firm Leonard Green & Partners in order to finance a deal to go private. The family group is in talks to raise up to $8 billion in order to finance the deal and will be looking a formal bid in the coming weeks.
The stock is down 0.61% in 2017 and 3.1% year over year. Nordstrom recently announced that it would roll out department stores without merchandise. The company has made a commitment to investing in e-commerce and concentrating on a smaller number of well performing stores. Leaning on e-commerce and focusing on a select few major metropolitan locations has become a growing strategy among even luxury retailers. Nordstrom operates over 350 stores in North America.
Nordstrom stock offers a dividend of $0.37 per share representing a 3.1% dividend yield. Investors have soured on department chains in recent years. Major U.S. retailers like J C Penney Company Inc, Radioshack, Macy’s Inc, and Sears, to name a few, have faced massive store closures and possible bankruptcy.
Nordstrom established itself as a brand that markets high-end merchandise at affordable prices for middle and upper middle class shoppers. As it turns to go private it is an interesting play in the midst of cooling investor sentiment across the retail industry.
