Nordstrom is taking itself private. A sound decision that helps protect the brand in the longer term – although not one that automatically remedies all problems. I chatted with Retail Dive…https://t.co/QHW77avNAq
— Neil Saunders (@NeilRetail) December 23, 2024
Nordstrom, the iconic department store chain, is set to be acquired by members of the Nordstrom family and El Puerto de Liverpool, a Mexican retail group, in a deal valued at $6.25 billion. The transaction, announced on Monday, will take the company private. As part of the agreement, Nordstrom shareholders will receive $24.25 in cash for each share of common stock they own.
#USA 🇺🇸🛍️ A #ChristmasShopping, #retail update …
The #Nordstrom family is joining forces with a Mexican retailer to take its namesake department store private in an all-cash transaction valued at about $6.25 billion, including debt.https://t.co/2xUjHj5Dad@JENeumann reports
— 🚶🏻Curtis S. Chin (@CurtisSChin) December 23, 2024
This represents a 42% premium over the company’s stock price on March 18, the last trading day before speculation about the potential acquisition emerged. Once the deal is finalized, the Nordstrom family will hold a majority ownership stake of 50.1%, while El Puerto de Liverpool, which currently owns a 9.6% stake acquired in 2022, will own the remaining 49.9%. The Nordstrom family collectively owns 33.4% of the company.
Erik Nordstrom, the CEO and a fourth-generation member of the Nordstrom family, expressed his enthusiasm for the deal.
MyPOV: the business model fundamentals are the issue, not the ownership structure.
The founding family of Nordstrom clinched a $4 billion deal to take the struggling department-store chain private https://t.co/YVuKpG2drh
— R “Ray” Wang 王瑞光 R.NFT #AI #1A #Cupertino (@rwang0) December 24, 2024
“For over a century, Nordstrom has operated with a foundational principle of helping customers feel good and look their best,” he said. “Today marks an exciting new chapter for the business.
Nordstrom’s strategic ownership shift
On behalf of my family, we look forward to working with our teams to ensure Nordstrom thrives long into the future.”
The Nordstrom Board of Directors unanimously approved the proposed transaction, following the recommendation of a special committee that led the review and negotiation process. Erik and Pete Nordstrom recused themselves from the decision.
Eric Sprunk, chairman of the special committee, remarked, “The special committee unanimously concluded that this transaction offers greater value for all public shareholders at a significant premium to the unaffected share price.”
Founded in 1901 in Seattle, Nordstrom has stood out among department stores by maintaining favorable real estate and catering to a higher-income clientele. Despite this, it has not been immune to the challenges faced by brick-and-mortar retailers in the age of e-commerce. The sale price trails the $78 a share Nordstrom reached in public markets about a decade ago.
However, in recent business updates, the company reported expanded net sales and gross profits in its third quarter, bolstered by increased full-price merchandise sales. Its off-price Nordstrom Rack business also reported a 3.9% rise in comparable sales last quarter. With the completion of the transaction, Nordstrom will transition from a public to a private company, and its common stock will no longer be listed on public markets.
As of the market close on Monday, Nordstrom’s stock was priced at $24.17. This acquisition marks a significant shift in Nordstrom’s ownership and operational strategy, promising a new era for the iconic retailer as it aims to strengthen its competitive position in the evolving retail market.
