Nordstrom, the iconic century-old department store, is set to transition into private ownership through a $6.25 billion acquisition by family members of the Nordstrom clan and the Mexican retail group, El Puerto de Liverpool. This move comes at a time when traditional department stores are grappling with increasing competition from discount retailers and e-commerce giants.
As part of the deal, shareholders will receive $24.25 in cash per share, totaling around $4 billion, which represents a significant 42% premium compared to the stock’s value on March 18, just before rumors of the acquisition surfaced. Additionally, the family will be taking on more than $2 billion in debt.
Operating as a private entity may offer the Nordstrom family greater flexibility to rejuvenate the department store’s performance, which has struggled to improve sales over the years. While other publicly traded retailers such as Macy’s and Kohl’s face intense pressure from investors to deliver quick returns, the Nordstrom family can focus on long-term growth and strategic changes without the constant scrutiny of public shareholders.
Analyst Neil Saunders from GlobalData expressed optimism about the ownership change, highlighting that it could enable the Nordstrom family and their associates to make significant investments to enhance the brand’s performance. He noted that their approach would likely be centered on retail, which bodes well for the brand’s long-term sustainability.
The Nordstrom family and El Puerto de Liverpool’s recent offer exceeds their previous bid of $23 per share made in September. The board plans to approve a special dividend of up to 25 cents per share prior to the deal’s closure, which is anticipated in the first half of 2025. Afterward, Nordstrom will no longer be a publicly traded company.
Following this acquisition, the Nordstrom family will control a majority stake in the company, with Erik Nordstrom serving as chief executive and Pete Nordstrom as president. The retailer, which began as a shoe store in 1901, has expanded to operate 381 Nordstrom and Nordstrom Rack stores across the U.S., having opened 23 new locations this year alone.
This strategic shift could signal a new era for Nordstrom, allowing the brand to innovate and adapt under family leadership while potentially enhancing customer experience and sales in a competitive retail landscape. There’s hope that this transition will lead to revitalization and renewed strength for the storied retailer as it navigates ongoing market challenges.