Nordstrom Rack ‘likely the future’ of retail as it goes private

Fashion retailer Nordstrom ( JWN ) is going private in a $6.25 billion buyout deal between members of the Nordstrom family and Mexican retail group El Puerto de Liverpool ( ELPQF , PLV1.F )

The deal could bode well for Nordstrom from a buyer’s perspective, as the massive retail chain is still “undervalued at this price,” Morningstar senior equity analyst David Swartz told Yahoo Finance.

Swartz joins Market Domination hosts Josh Lipton and Seana Smith to expand on Nordstrom’s buyout.

“I think it’s a very good deal for the buyout group,” explains Swartz. “I also understand that there’s a reason that Nordstrom should probably go private, and that’s because investors just aren’t giving good valuations to department store companies right now.”

The analyst goes on to say that as Nordstrom opens up more Nordstrom Rack locations, “that’s really probably the future of the company. Even though Rack is smaller than the main Nordstrom stores, Rack is probably better positioned for the type of retail market that we have today.”

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This post was written by Josh Lynch