CEO Erik Nordstrom and executive vice president Pete Nordstrom, along with a group of investors, have offered $3.8 billion to take Nordstrom Inc., The New York Times reported, citing a regulatory filing by the department story company. That sum represents $23 per share in cash. The New York Times said the retailer has formed a committee of directors to consider the deal and noted that Nordstrom’s valuable real estate had been expected to help the retailer perform well despite headwinds like inflation and decreased spending on discretionary purchases.
Macy’s Inc., another department store company deemed to hold value in its real estate, ended discussions in July of a $6.9 billion takeover by investment firm Arkhouse and Brigade Capital Management. To realize the value of its real estate, Macy’s Inc. now will continue with plans to close 150 stores by 2026. That includes 55 stores for 2024. “We are pleased with the pace and the quality of dealmaking and now expect to close approximately 55 stores this year versus prior expectations of roughly 50,” CEO Tony Spring said on a second-quarter earnings call.
Nordstrom Rack’s performance was “patchy” last year, according to The New York Times, contributing to a “struggle” last year for its parent company. The off-price chain did improve in the second quarter of 2024, and a recent Retail Brew story covered the off-price retailer’s online-sales efforts. If Nordstrom Rack can make digital sales work, which has proven difficult for its off-price peers, that differentiation could help the parent company. In fact, Erik Nordstrom maintained during the recent earnings call that the dynamic of Nordstrom Rack’s existence within a larger company is what helps the chain’s digital sales efforts succeed. “It works for us because it's part of our bigger ecosystem, and we see more opportunities there to leverage on the capabilities to engage with customers more and get a bigger share of the wallet,” he said.
Simon Adds On-Sale and Discount Merchandise to Online Marketplace
There’s more this week in omnichannel retail. Simon has reconfigured and rebranded its online marketplace as ShopSimon and added on-sale and discount merchandise “while continuing to offer outlet products from leading brands,” the company said. It said ShopSimon.com and the ShopSimon app will serve as a single source of premium and luxury sale-priced products. Simon’s previous online marketplace, Shop Premium Outlets, launched in 2019.
Simon indicated that retailers that participate in ShopSimon benefit from the landlord’s “national reach to engaged shoppers” and “insight into consumer preferences and behaviors.” Simon also stated it’s easier for retailers to populate this platform with goods: “Retailers have full control over their product assortment, pricing and marketing; can pulse products on and off as inventory dictates; and align their offerings with a carefully cultivated premium and luxury marketplace.”
Fulfillment enhancements, including same-day pickup, will come soon, the landlord said.
How Foot Traffic Fared Downtowns and Malls Draw Crowds Through Labor Day
Strong pedestrian traffic over Labor Day weekend continued U.S. shopping malls’ solid August performance and countered U.S. downtowns’ weaker one, according to MRI Software.
At shopping malls, pedestrian traffic for the Sunday of Labor Day weekend increased 6.6% year over year. That came after a positive August in which pedestrian traffic at malls rose 10.7% year over year on weekdays and 9.9% year over year on weekends. MRI defined the month of August as July 28 through Aug. 24, and an MRI spokesperson defined shopping malls as “enclosed shopping destinations usually located on the outskirts or out of town.”
In downtowns, pedestrian traffic for the Sunday of Labor Day weekend rose 11.2% year over year. That came after a 0.7% year-over-year decrease for August weekdays and a 1.1% year-over-year decrease for August weekends. The 0.7% combined drop was the first monthly year-over-year decline since January. MRI senior director Cederick Johnson posited in an August footfall report that high temperatures could have prompted people to avoid outdoor retail destinations like downtowns in favor of air-conditioned malls.
Inspiring Leaders
Connect CRE this summer has been running Q&As with Inspiring Leaders in Our Changing Industry. Among those who appeared this week were ICSC executive board member Arturo Sneider. ICSC president and CEO Tom McGee featured earlier this summer, as did other ICSC members. Check them out:
Primestor founder and CEO Arturo Sneider
Partner Engineering and Science CEO Joe Derhake
Buildout chief growth officer Helen Calvin
ICSC president and CEO Tom McGee
The Inland Real Estate Group CEO Anthony Chereso
X Team Retail Advisors president and Velocity Retail Group president Dave Cheatham
BH Properties president Jim Brooks
Marcus & Millichap president and CEO Hessam Nadji
Colliers Real Estate Management Services U.S. president and CREW Network 2024 president Karen Whitt
Arturo Sneider in C+CT
The Relationship Between Shopping Center Development and Social Equity: How Arturo Sneider Does It
Mark Millman Has Died
Millman Search Group founder and CEO Mark Millman died on Aug. 29 at the age of 74. His more-than-40-year career in human resources began at companies like Marriott Corp., Woodward & Lothrop department store and Webster Men’s Wear, according to the website of Millman Search Group’s website. He founded the executive search firm in 1982.
A Millman Search Group communication to clients said: “His dedication to his clients and his relentless work ethic were hallmarks of his career.” It also stated: “Mark’s legacy will live on through the countless lives he touched and the high standards he set for our industry. He will be deeply missed by all who had the privilege of working with him.”
By Amanda Metcalf
Editor in Chief, Commerce + Communities Today