By Nandita Bose and Gayathree Ganesan
REUTERS - Department store operator Nordstrom Inc said on Thursday that some members of the controlling Nordstrom family have formed a group to consider taking the company private, as it struggles with an industry-wide slowdown in sales.
Shares of the Seattle-based company jumped as much 18 percent in their biggest intraday percentage gain since February 2009. It now has a market value of about $7.4 billion.
Shares of other U.S. department store chains also rose after Nordstrom's announcement. Dillard's Inc gained 6.3 percent, Macy's Inc rose 3.3 percent and Kohls Corp climbed 1.3 percent in Thursday morning trading.
The move comes as malls around the country have been struggling with slowing customer traffic and mall anchors like Nordstrom and Macy's are trying to revive sales.
Nordstrom's same store sales missed estimates during the first quarter causing its shares to tumble in May.
Going private may help Nordstrom restructure its business, which is more difficult as a public company, said Erich Joachimsthaler, chief executive of Vivaldi, a consulting firm that works with retail brands. "It's the right move," he said.
In a filing with the U.S. Securities and Exchange Commission, the department store operator said the group formed to consider going private had not yet made a formal proposal. The group comprises Chairman Emeritus Bruce Nordstrom, his sister Anne Gittinger, President James Nordstrom and co-Presidents Blake, Peter and Erik Nordstrom - regarding a potential private transaction.
The group, which owns 31.2 percent of the company, said it was not interested in selling its stake to third parties or vote for an alternative deal.
"Because of the changing dynamics in the retail environment, the group is evaluating whether the long-term interests of the issuer (Nordstrom) are better served as a privately held company," the members of the Nordstrom family said in a filing.
The company's board has formed a special committee of independent directors to explore the possibility of any transaction that could be made by the group.
The committee said it had entered into an agreement with the members of the Nordstrom family over some standstill provisions that would prevent them from taking certain actions until Jan. 31, 2019. The special committee has hired Centerview Partners as its financial adviser and Sidley Austin as legal counsel.
(Reporting by Nandita Bose in Chicago and Gayathree Ganesan in Bengaluru; Additional reporting by Siddharth Cavale in Bengaluru and Lewis Krauskopf in New York; Editing by Saumyadeb Chakrabarty and Bill Rigby)
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