Just a week short of the New Year, Nordstrom, Inc., announced that the Nordstrom family and Liverpool would acquire all outstanding common shares of the retail giant. Following the transaction close, the Nordstrom family will have a majority ownership stake in the company.
“For over a century, Nordstrom has operated with a foundational principle of helping customers feel good and look their best,” Erik Nordstrom, chief executive officer for the retailer, said in a release. “Today marks an exciting new chapter for the business. On behalf of my family, we look forward to working with our teams to ensure Nordstrom thrives long into the future.”
As it turns out, footwear industry leaders familiar with Nordstrom share in the family’s optimism and excitement. “The private ownership allows for less regulation and reporting. This way you will not live and die by a bad quarter,” offers John D’hondt, former Nordstrom employee and longtime member of the footwear business. “Private ownership will allow it to chart new paths to growth and thus offer the ability to partner with brands. Mr. Bruce wrote a book called Leave It Better Than You Found It. I believe that this generation has large shoes to fill, and this is the next evolution in leaving it better than they found it.”
All In the Mix: Merchandising
Sam Spears, president of Ara North America, shares in the sentiment that the move may bolster the retailer’s footwear arm. “I am hopeful that Nordstrom going private will allow investment in staffing up the footwear buying department,” he explains. “It’s amazing what this small buying team has been able to achieve given the fact that I am sure they are stretched very thin, but there is no telling what heights and amazing things they can achieve if they had some extra hands to help carry the load.”
Suzanne Lorenz, Sales and Marketing for Diba True, can personally attest to just that. Lorenz’s father, Joe Butrus, launched Diba out of the family’s basement in 1989 and put her in charge of going after Nordstrom. “I was still living at home at the time,” she remembers. “Back in the beginning, Nordstrom had individual buyers for each location. The first territory to pick up the brand from me was DC. It was quite an undertaking, but we grew that business to include many Nordstrom stores across the country, and we ultimately provided private label product as well.” Flash-forward to today, Lorenz oversees the company’s drop-ship division, where the retailer remains a buyer.
“Being privately owned gives Nordstrom more flexibility to provide the right product,” she offers. “Sometimes in the footwear industry, publicly traded companies worry more about their next report than product.” Lorenz hopes this move will allow the retailer to react more quickly to trends and lead with the gold standard of product assortment. “Back in the day, Nordstrom was a must-shop for trends, and now Nordstrom has the opportunity to be that leader again,” she adds.
A Return to Exemplary Service
Tony Adams, president of Hälsa Footwear, agrees the move provides the retailer an opportunity to improve its merchandising. “Without the pressure of reporting to stockholders, Nordstrom can now focus on merchandising strategies, investments, and their employees,” he says. “This could include store improvements, merchandise improvements and new strategies, which they are known for. The Nordstrom family will have more control over the company’s direction and decision, which could lead to more aligned decision making.”
Along with an improved product assortment, shoepeople are looking for a return to the retailer’s legendary customer service. Kitty Bolinger, president of Dansko, is looking forward to the positive impact this can have on the industry as a whole. “As a private company, Nordstrom will be able to invest in things that matter to their consumer — well-trained staff, adequate inventory and a positive 360 degree shopping experience,” she says. “When a consumer is introduced to a brand at Nordstrom, the word of mouth positively impacts not just the brand but other retailers because consumers start to seek out the brand in the marketplace.”
