Nordstrom’s greatest challenge is to keep the upper-middle class; especially the younger upper middle class, coming to its brick and mortar stores.Read more
The potential of this are absolutely staggering. Just a few of the things Uncle Warren can do with all that cash include:
Buy America’s second largest grocer; Kroger (NYSE: KR), outright and still have $75.56 billion left in the bank. That’s amazing because Kroger reported revenues of $118.05 billion on 31 July 2017. Kroger had an enterprise value of $32.74 billion on November 10, 2017.
Nordstrom has demonstrated that retailers like Barnes & Noble might have more value than many people think. Unfortunately, that value is not presently being exploited in any sort of meaningful way. Barnes & Noble is doomed without an acquisition or a radical change in business plan.Read more
The situation at Nordstrom is teaching a hard lesson that all investors need to learn. It is even good stocks and brands will suffer in the retail apocalypse.Read more
A final option at Penney’s is to start offering more unusual discounts like those seen at the TJX Companies (NYSE: TJX) stores. TJX has survived by turning its stores like Marshalls and TJX Maxx into giant bargain basements and offering lots of weird off the wall buys.
An obvious development here would be for TJX to buy JC Penney’s. TJX certainly has the resources to acquire Penney’s it reported $2.952 billion in cash and short-term investments and $3.521 billion in cash from operations on July 31, 2017.Read more
Amazon has some value-investment characteristics including a lot of cash and the ability to generate vast amounts of cash on a regular basis. The problem is that unlike companies such as Microsoft, Oracle, Alphabet, and Apple, it cannot keep that cash around.Read more
This does not mean Amazon would not buy a department store. I can certainly picture it acquiring Nordstrom (NYSE: JWN); which has a “best in the industry” reputation, and a loyal customer following much like Whole Foods. It also likes to implement next generation retail practices like setting up “storefronts” for online merchants and Tesla dealerships in its stores.Read more
These numbers show us that Nordstrom is neither a value investment nor Amazon-proof because it operates at a very narrow margin. All Amazon or Walmart would have to do to seriously damage Nordstrom is take 3% to 5% of its customers away.Read more
The demographics indicate that Nordstrom’s customer base is growing and that those customers have more money. This retailer is in a very enviable position given America’s current state but is it a good investment?Read more
Macy’s has done surprisingly well for a department store operator in today’s retail environment.Read more