[HN Gopher] Nordstrom family to take company private
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Nordstrom family to take company private
Author : ivewonyoung
Score : 65 points
Date : 2024-12-23 17:38 UTC (5 hours ago)
(HTM) web link (www.bloomberg.com)
(TXT) w3m dump (www.bloomberg.com)
| bhouston wrote:
| 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.
| whateveracct wrote:
| 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.
| mitthrowaway2 wrote:
| 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.
| flyingpenguin wrote:
| 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....
| ajmurmann wrote:
| 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.
| AzzieElbab wrote:
| Consider yourself lucky. My feet are not just wide. I wear
| 10.5 size and have high arches.
| luckylion wrote:
| > 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.
| malfist wrote:
| 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
| lesuorac wrote:
| > 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...
| luckylion wrote:
| > 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.
| _DeadFred_ wrote:
| 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.
| fsckboy wrote:
| isn't New Balance known for wide shoe sizes?
| DHPersonal wrote:
| 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. :)
| ajmurmann wrote:
| 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?
| well_actulily wrote:
| 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.
| mlinhares wrote:
| 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.
| daft_pink wrote:
| 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.
| legitster wrote:
| 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.
| acdha wrote:
| 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.
| philwelch wrote:
| If a business's assets are more valuable than the business
| itself, it's a bad business.
| xethos wrote:
| 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).
| bhouston wrote:
| > 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.
| ghaff wrote:
| 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.
| neom wrote:
| 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?
| ajmurmann wrote:
| Would that work online? A lot of these goods I want to see in
| person and ideally touch before purchase
| neom wrote:
| 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!
| notatoad wrote:
| >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.
| kylehotchkiss wrote:
| 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.
| daft_pink wrote:
| 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.
| Eric_WVGG wrote:
| Seemed to work pretty well for Dell Computer.
| kevin_thibedeau wrote:
| The Walton family disproves that theory.
| Aloha wrote:
| 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
| kylehotchkiss wrote:
| 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!
| r00fus wrote:
| 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.
| wombat-man wrote:
| 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.
| conductr wrote:
| 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.
| AzzieElbab wrote:
| 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
| legitster wrote:
| Nordstrom played really smart - they didn't overexpand or cheap
| out their brand.
| ciabattabread wrote:
| They had the failed Canada expansion, but they smelled like
| roses compared to the crash and burn of Target Canada.
| transcriptase wrote:
| 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.
| bpye wrote:
| 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.
| transcriptase wrote:
| 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.
| mywittyname wrote:
| 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.
| buildsjets wrote:
| 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.
| jeffbee wrote:
| 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.
| skyyler wrote:
| Heimie's Haberdashery in Saint Paul still offers this sort
| of personal styling, and they offer tailoring as well.
| Definitely worth a stop if you're in the Twin Cities.
| chokolad wrote:
| 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.
| kylehotchkiss wrote:
| This is some really solid advice, thanks Buildsjets. I'm
| gonna give this a try sometime.
| dagmx wrote:
| 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.
| cogman10 wrote:
| 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.
| imzadi wrote:
| 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.
| infogulch wrote:
| > 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
| Loughla wrote:
| What happens if I don't want to sell my shares? I don't
| understand how that works.
| dghlsakjg wrote:
| 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.
| Horffupolde wrote:
| There are drag along clauses or forced buyout clauses of
| public shares.
| tiffanyh wrote:
| Revenue: ~$15B Profit: ~$0.3B
|
| https://press.nordstrom.com/static-files/e5cb0f84-48b5-4d4a-...
| phkahler wrote:
| 0.3B / 6.25B = ~5% which is pretty good. If they can boost it
| somehow then even better.
| EE84M3i wrote:
| 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.
| moffkalast wrote:
| I keep reading that in the way prof. Farnsworth yells
| "Wernstrom!" in Futurama
| neonate wrote:
| https://archive.ph/a1nu4
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