Nordstrom Family Reclaims Ownership of Iconic Retail Chain in $6.25 Billion Deal
Nordstrom, the 123-year-old upscale department store chain, is set to go private in a $6.25 billion deal led by its founding family in partnership with Mexican retailer El Puerto de Liverpool. The move, announced on Monday, marks a significant shift in the company’s trajectory amid ongoing challenges in the retail sector.
Family Takes the Helm
The Nordstrom family – Erik, Pete, and Jamie Nordstrom – along with El Puerto de Liverpool, will acquire the remaining shares of the company they don’t already own, solidifying majority ownership. Under the terms of the agreement, shareholders will receive $24.25 per share in cash, representing a 42% premium from the stock’s value as of March 18, 2024, when speculation about a buyout first surfaced.
“This is an exciting new chapter for Nordstrom,” said CEO Erik Nordstrom in a statement. “For over a century, our mission has been to help customers feel good and look their best. With this move, we’re committed to ensuring the long-term success of the business.”
A Changing Retail Landscape
The decision to go private comes as Nordstrom, like many traditional department stores, grapples with shifting consumer habits. The rise of online shopping giants like Amazon and rental services such as Nuuly has cut into sales, while economic pressures have led to reduced discretionary spending.
Despite efforts to modernize, Nordstrom’s stock value has significantly declined, trading at roughly half its pre-pandemic peak. The family’s earlier attempt to take the company private in 2018 at $50 per share was rejected by the board, making this latest deal a more affordable acquisition.
Expert Opinions on the Transition
Retail analyst Neil Saunders of GlobalData commended the move, suggesting it could free Nordstrom from the short-term pressures of public markets. “The family and their backers have the talent and ability to make the necessary investments and changes,” Saunders noted. “This strategy positions Nordstrom as a retailer focused on long-term health rather than financial manoeuvring.”
Industry Implications
The Nordstrom deal follows other major shifts in the department store landscape, including the merger of Saks Fifth Avenue and Neiman Marcus. Rivals like Macy’s and Bloomingdale’s are also facing investor scrutiny, with some arguing their real estate assets outweigh the value of their retail operations.
What’s Next?
The deal is expected to close in early 2025, pending approval from two-thirds of Nordstrom’s shareholders. As the company transitions, the Nordstrom family, alongside El Puerto de Liverpool, aims to steer the brand through evolving consumer demands and intense competition in the retail market.
