Nordstrom to become private in $6.25b buyout deal

Nordstrom announced on Monday that it will go private in a buyout deal valued at approximately $6.25 billion.  The deal, approved unanimously by the company’s board, involves Nordstrom’s founding family and Mexican department store El Puerto de Liverpool. The transaction is expected to close in the first half of 2025. Under the terms of the agreement, the Nordstrom family will hold a majority stake of 50.1%, while Liverpool will own 49.9%. Common shareholders will receive $24.25 in cash for each share of Nordstrom stock they own. CEO Erik Nordstrom expressed excitement about the new chapter for the company, emphasizing that the Nordstrom family remains committed to the retailer’s long-term success. “We look forward to working with our teams to ensure Nordstrom thrives long into the future,” he said. This is not the first attempt to take Nordstrom private. In 2018, a previous effort failed. The family made another offer in September, proposing $23 per share, which valued the company at approximately $3.76 billion.  Nordstrom’s stock fell by about 1% in early trading following the announcement, but shares had risen since reports emerged in March that the family was considering taking the company private. In the fiscal third quarter, Nordstrom exceeded Wall Street's sales expectations, reporting a 4% year-over-year revenue increase. However, the company issued a cautious forecast for the holiday season, anticipating a soft shopping period as consumers remain selective and price-conscious, especially for luxury goods.  The shift in consumer behaviour has affected luxury clothing retailers, with major chains like Walmart, Best Buy, and Target also seeing customers prioritizing needs over wants. Founded in 1901 as a shoe store, Nordstrom has since expanded into a department store offering a wide range of clothing and accessories through more than 350 locations, including Nordstrom Rack and Nordstrom Local stores.  El Puerto de Liverpool operates the Liverpool and Suburbia department store chains and owns 29 shopping centres across Mexico.

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