How Much Stock Does the Nordstrom Family Own? - Financhill

How Much Stock Does the Nordstrom Family Own?

Most people are familiar with the Nordstrom (JWN) chain of department stores. The retailer tends to focus on luxury items, including clothing, jewelry, handbags, and fragrances. But few people know much about the family behind the brand. And how much stock does the Nordstrom family own?

Nordstrom 101

John Nordstrom, an immigrant from Sweden, founded Wallin & Nordstrom in 1901 as a Seattle shoe store. Nordstrom wanted to start a business from the fortune he had accumulated during the Klondike Gold Rush. Wallin owned a shoe-repair shop, so it made sense for the two businessmen to join forces.

Wallin & Nordstrom grew rapidly during its first 50 years, but it remained a shoe store. It didn’t add clothing to its line until the company acquired Best Apparel of Seattle in 1063. At this point, the company also changed its name to Nordstrom Best.

Nordstrom became a publicly traded company in 1971 when it got listed on the NASDAQ stock exchange. It continued to open department stores across the United States and add new products to its shelves. Some of the Nordstrom stores even sold furniture, making them all-purpose department stores where shoppers could purchase practically anything they needed for their homes.

In 1999, Nordstrom moved from NASDAQ to the New York Stock Exchange. Since then, the Nordstrom family has repeatedly tried to assert its control over the brand.

Is Nordstrom Still Family Owned?

The Nordstrom family still owns quite a bit of the company – more on this in a moment.

It also has a heavy influence on the department store’s operations. At least two members of the Nordstrom family have key positions within the business. Erik Nordstrom fills Nordstrom’s ZEO position. Peter Nordstrom is the company’s co-president.

You cannot realistically consider Nordstrom a family-owned company, though, because it’s a public entity that shares stocks on the NYSE.

How Much Stock Does the Nordstrom Family Own?

It’s unclear how many shares the entire Nordstrom family owns in the company. According to an article published in The New York Times, though, Blake W. Nordstrom and Peter E. Nordstrom, own about 30% of Nordstrom’s shares. 

In 2018, the Nordstrom family offered to buy shares at $50 each. The offer emphasized that $50 was about 24% higher than share values when the company considered going private the previous June. By Monday, though, shares reached $51.90.

The Nordstrom family’s offer may have actually given the company the boost it needed to for its shares to reach a higher price.

The Nordstrom family wants to make Nordstrom a private company, again. That approach would give them the power to operate the department store chain with little oversight. As a public company, it must answer to shareholders and a board of directors.

In 2019, the Nordstrom family began exploring more options to regain control of the company. At the moment, no strategies have been made public. It seems unlikely that the family could purchase the business and make it private again. It could, however, purchase a controlling number of shares that would give it even more control over operations and finances.

It’s worth noting that Nordstrom’s stock prices have been incredibly volatile in recent years. In 2007, the company saw an impressive surge that took share prices to nearly $60.

By the end of 2008, share prices plummeted below $8. Since then, the value has gone up and down unpredictably. Not surprisingly, the coronavirus pandemic hurt the company greatly. Still shares have not recovered.

What Companies Does Nordstrom Own?

Nordstrom owns several companies, including online retailers. Some of the companies controlled by Nordstrom include:

  • HauteLook, which Nordstrom acquired in 2011.
  • Jeffrey, which closed during the coronavirus pandemic.
  • Nordstrom Local, which the company started in 2017.
  • Nordstrom Rack, a discount store that Nordstrom founded in 1973/
  • Trunk Club, a subscription trunk club that sends curated clothing to members.

Should You Consider Investing in Nordstrom?

Whether you should consider buying shares in Nordstrom depends on several factors, such as how much risk you can add to your portfolio and whether you believe the department store will rebound after the pandemic ends.

Recently, you could buy Nordstrom shares for less than $20. Before the pandemic began hurting the American economy in March, Nordstrom shares sold for about $40.

Assuming that the company manages to survive the pandemic and return to its pre-pandemic value, you could double your investment by purchasing inexpensive shares now.

There are a lot of assumptions in that strategy, though. Retail stores have been hit hard by COVID-19. There is a chance that Nordstrom could go bankrupt like Pier 1 Imports, Dean & Deluca, Neiman Marcus, J. Crew, JCPenney, and NY&C.

Some investors believe that Nordstrom can survive because it focuses on the desires of people with enough money to buy luxury items. That belief doesn’t look promising when you consider that Pier 1 Imports, J. Crew, Neiman Marcus, and Dean & Deluca had a similar base of customers.

The Nordstrom family’s plan to take the company private could also benefit or harm your investment strategy. If the family takes its plan seriously, then it will buy shares at above-market values. That will give you a chance to make money quickly. Then again, the family may just wait until bankruptcy forces the department store chain to make desperate moves. In that case, you will lose your investment while the family picks up its namesake for next to nothing.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.

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