Nordstrom drops possibility of going private, for now
The company announced Monday that members of the Nordstrom family, company co-presidents Blake W. Nordstrom, Peter E. Nordstrom and Erik B. Nordstrom, president of stores James F. Nordstrom, chairman emeritus Bruce A. Nordstrom and Anne E. Gittinger, have notified a special committee of the board that they have “suspended active exploration, for the balance of the year, of the possibility of proposing a transaction to take the company private”.
They added, however, that they intend to continue their efforts to explore the possibility of making a going private proposal after the conclusion of the holiday season. The company offered no assurances that a proposal would come or what its details and terms might consist of.
According to the special committee, which is committed to protecting the interests of the company and all its shareholders, it is prepared to thoroughly evaluate such a proposal from the group, if one is made.
September retail sales improve in the US
Neil Saunders, managing director of GlobalData Retail, said retail spending in the US showed moderate growth, supported by both higher gas prices and an increase in the number of people buying vehicles. “Outside of these two segments, especially in pure retail and foodservice, spending also ticked up albeit to a more moderate degree,” Saunders said.
Saunders said although the devastating hurricanes boosted the numbers, mostly thanks to stimulating demand to replace damaged cars and by initially pushing up gas prices, the figures nonetheless demonstrate the robustness of the American consumer.
“Indeed, the fear for September was that as gas prices rose, spending on other things would fall back,” he said.
“In the end, this did not materialise, and consumers used modest gains in wages – supported by the robust labour market – to carry on buying even as they incurred additional expense.”
Saunders said the comfortable position of the consumer is underscored by their weekly sentiment tracker.
“This showed a little more caution about future household finances creeping in during September but also revealed very few significant changes in purchasing habits across the month,” he said.
“In our view, the American consumer has quite a bit of firepower, even if some of this is being funded by credit. Excluding energy, more subdued inflation also helped to buoy the consumer mood.”
On a sector level, home improvement retailers performed well with a 7.7 per cent uplift in sales over the prior year.
“There is some benefit here from the rebuilding effort after the various disasters, but we believe that the bulk of the hurricane-related uplift has yet to come through,” Saunders said. “As such, a surge of household projects related to winter preparation played as much of a role in lifting the DIY sector as did other factors.”
At the other end of the spectrum, electricals stores remain the laggards of retail with a 5.3 per cent year-over-year decline in sales this month. Some of this is down to the shift to sales via other channels and retailers, but some is also due to a relative lack of interest in products.
“It remains to be seen whether the release of new devices, like Apple’s iPhones, will help lift this sector as we move into the holiday season,” he said. “We remain skeptical that it will do so to any significant degree.”
Saunders said using the September numbers as a guide to holiday performance is challenging, not least because of the various exceptional factors which have impacted the month.
“However, stripping these out suggests that the consumer is in a good and stable position which bodes well for the critical upcoming trading period,” he stated. “That said, it is clear that while the consumer is still willing and able to spend, they are doing so conservatively and are carefully weighing up the necessity and the value of purchases.”
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