Nordstrom is looking at spinning off its discount Nordstrom Rack business to trim its losses, Seeking Alpha reported. The company was down 0.6% as of Monday (Dec. 20).
The fashion retailer has an adviser looking into the Rack business’s options, the report stated. Experts have speculated that Nordstrom might complete a merger or acquisition after the Nordstrom family suspended a deal to buy the company in 2017.
In 2018, Nordstrom’s special board committee announced the dissolution of talks with the Nordstrom family about taking the company private, according to the report.
The possible Rack spinoff comes as Neiman Marcus is also considering splitting itself into multiple companies.
Read more: Neiman Marcus Could Split Into Three Businesses
Macy’s has also been pressured to spin off its eCommerce business.
See more: Customers’ Use of Physical Stores Makes Macy’s Online Split More Challenging
Earlier this year, Nordstrom saw a 30% stock drop.
Read more: Does the ‘Ord’ in Nordstrom Now Stand for Ordinary?
The 120-year-old business was struggling to get enough of the high-priced exclusive products its customers want to buy at full price.
“Our average price was down 4%,” CEO Erik Nordstrom said in November. “Not only does that put a lot of pressure on our operations, it just isn’t what the customer wants. The customer wants these top premium brands, and so our mix has skewed a little more lower-priced than our customer wants.”
The Nordstrom Rack unit, which has almost three times as many locations as the regular store, has been underperforming after being “challenged by low inventory levels in premium brands” in multiple areas like women’s apparel and shoes.
This issue happened with the high-priced items at the main store and had also trickled down to Rack.
In addition, Nordstrom has been adapting to digital modes of sales and also trying to keep up with changing trends.
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