What: Nordstrom's prospects for going private in 2024 look promising, with improved financial results, favorable interest rates, and regulatory environment supporting the $3.8 billion buyout offer from the Nordstrom family and Liverpool.

Why it is important: The potential success of this privatisation bid could signal a broader shift in how traditional department stores approach transformation, balancing the need for immediate results with long-term strategic planning.

The Nordstrom family's $23-per-share privatisation bid, totaling $3.8 billion, shows increased potential for success compared to their failed 2017 attempt at $50 per share. The company's financial results are improving, and executives have effectively managed expectations while benefiting from lower interest rates and a more favorable regulatory environment. The Nordstrom family, along with Mexican retailer Liverpool, aims to acquire all outstanding shares they don't already own, requiring more than 50% of voting shares to complete the privatisation. While the process could take months, industry experts note that market conditions are more conducive to such deals, with available capital and improving business performance creating a more favorable environment for private ownership.

IADS Notes: Following the September 2024 offer with Liverpool, improved financial results and lower interest rates have increased the likelihood of success. However, as retail experts note, while going private may not solve fundamental challenges faced by department stores, it could provide the flexibility needed for long-term transformation.

Weighing Nordstrom’s chances of going private