Nordstrom Going Private in $6.25B Deal with Founding Family and Mexican Retailer
Nordstrom, the iconic American department store, is set to become a private company in a groundbreaking $6.25 billion deal with its founding family and Mexican retail giant El Puerto de Liverpool. The agreement, approved unanimously by the company’s board of directors, is expected to be finalized in the first half of 2025.
Ownership Structure:
Under the terms of the deal, the Nordstrom family will hold a majority stake in the company with 50.1%, while El Puerto de Liverpool will own 49.9%. Common shareholders are poised to receive $24.25 in cash for each share of Nordstrom common stock they currently possess.
CEO Statement:
Expressing his enthusiasm for this new chapter, Nordstrom CEO Erik Nordstrom emphasized the company’s longstanding commitment to customer satisfaction, stating, “For over a century, Nordstrom has operated with a foundational principle of helping customers feel good and look their best. Today marks an exciting new chapter for the business.”
Previous Attempts and Market Response:
This move towards privatization is not Nordstrom’s first foray into this territory. A previous effort in 2018 did not come to fruition. Despite the news of this deal, Nordstrom’s stock experienced a slight decline of approximately 1% in early trading. The company’s shares had surged following a report in March regarding the family’s interest in taking the company private.
Challenges in the Retail Sector:
The decision to go private comes at a time when luxury retailers like Nordstrom are grappling with changing consumer behavior. As major players such as Walmart, Best Buy, and Target have observed, customers are becoming more discerning, particularly when it comes to non-essential purchases, and are increasingly price-conscious.
Company Background:
Founded in 1901 as a shoe store, Nordstrom has evolved into a leading department store chain with over 350 locations, including Nordstrom Local and Nordstrom Rack. Meanwhile, El Puerto de Liverpool, the Mexican retail powerhouse involved in this deal, operates two popular department store brands, Liverpool and Suburbia, along with 29 shopping centers across Mexico.
