NEW YORK, March 19 (Reuters) - America's biggest

publicly traded department store chains could be set for

private-equity or hedge-funds ownership, dramatically changing

the retail landscape in the United States.

Investments in retail and consumer companies accounted for

just 7% of the total U.S. private equity deal volume of $2.6

trillion in the last decade compared to nearly 15% of the total

volume of $1.7 trillion in the prior decade, according to

Dealogic data.

But deals for Macy's and Nordstrom might change the dynamic,

putting private ownership of major U.S. retailers back in vogue.

In its new bid to take Nordstrom private, for

example, the Nordstrom founding family wants to keep control of

the chain but doesn't want the pressure of having to release

quarterly performance as it's trying to figure out its strategy.

Nordstrom opened 19 new Nordstrom Rack locations in 2023 and

has plans to open an additional 22 stores in 2024, executives

told investors in a post-earnings call on March 5.

The rapid expansion of Rack, Nordstrom's discount-focused

sister chain, puts Nordstrom at odds with competitors such as

Macy's, which is shuttering around 150 nameplate Macy's

locations but recently outlined plans to open at least 45 new

upscale Bloomingdale's and Bluemercury stores over the next

three years.

The move will allow Macy's to focus on growing its

better-performing luxury brands, CEO Tony Spring told investors

in a post-earnings call in February.

Nordstrom Chief Financial Officer Cathy Smith told investors

in March that the company intended to "grow where the market is

growing" by expanding the presence of discount Rack stores.

The retailer currently operates 258 Nordstrom Rack locations

and 93 full-priced Nordstrom stores, according to its most

recent earnings release.

The expansion has come as department store chains struggle

with gloomy consumer demand and steep competition from off-price

retailers like TJX and Burlington Stores ( BURL ).

Nordstrom's expansion into its discount Rack business is an

effort to capture some lower-income shoppers while expanding its

presence in off-mall shopping centers, where Rack stores are

typically based.

"There are downsides to being a public company because

you're under scrutiny. People expect you to make numbers and hit

guidance, but that hasn't always been happening," said

Morningstar analyst David Swartz, referring to Nordstrom.

While Rack stores have been a bright spot in recent quarters

-- with sales increasing 14.6% year-over-year over the holiday

shopping period compared to a 3% decline at the full-price

Nordstrom banner -- the chain struggled with excess inventory

during the pandemic. A push to bring in lower-priced clothing

and footwear at some Rack locations also failed to attract

shoppers.

Nordstrom "can't seem to get both parts of the business

working at the same time," Swartz said.

Executives have since made changes to the Rack assortment,

bringing in more well-known brands such as Ugg and Cole Haan.

"We know that delivering great brands at great prices is what

our customers want," Nordstrom CEO Erik Nordstrom told investors

earlier this month.

The Nordstrom family invoked a so-called poison pill back in

2022 when the Mexican department store El Puerto de Liverpool

took a nearly 10% stake, which analysts have pointed to as

another sign that they want control of Nordstrom to stay with

the family.

Macy's, on the other hand, told Reuters on Tuesday that it

will open its books to Arkhouse and Brigade Capital, a potential

breakthrough in the investment firms' $6.6 billion bid to take

the U.S. department store operator private.

Having access to such due diligence could enable Arkhouse

and Brigade to secure debt commitments to finance the deal,

people familiar with the matter had earlier told Reuters.

A key difference, sources said, is that while the Nordstrom

family is pushing for private ownership, Macy's faces an

unsolicited hostile bid. And because Macy's is a better operator

with less leverage than Nordstrom, it's easier to finance, they

added.