Nordstrom, the iconic American luxury retailer, is set to go private through a $4 billion deal orchestrated by its founding family and Mexican retail giant El Puerto de Liverpool.
The agreement will see Nordstrom shareholders receive $24.25 per share, an increase from the initial $23 offer made in September, reported the New York Post.
The Nordstrom family will maintain majority control with 50.1% ownership, while Liverpool will hold 49.9%. This landmark move aims to shield the company from the pressures of public trading and pave the way for strategic investments during challenging times for high-end retailers.
The acquisition underscores the shifting dynamics of the retail sector, with companies like Nordstrom grappling to maintain sales growth amid inflation and increasing competition.
Traditional department stores, including Macy’s, have faced mounting pressure as consumers gravitate toward budget-friendly alternatives like Walmart and Target or off-price retailers such as T.J. Maxx, reported the Post. By taking the company private, the Nordstrom family seeks to create a long-term strategy free from the constraints of quarterly earnings expectations, a vision they first proposed in 2018.
The transaction, which includes $450 million in borrowings under a new $1.2 billion financing arrangement, is valued at $6.25 billion when factoring in debt. It is expected to close in the first half of 2025. This partnership offers Liverpool a foothold in the U.S. luxury market. Liverpool operates two department store chains and owns 29 shopping centers across Mexico. The collaboration may help both companies adapt to shifting consumer preferences and drive profitability in a competitive industry.
As Nordstrom CEO Erik Nordstrom described it, the deal heralds “an exciting new chapter” for the retailer, reported the Post.
Founded as a shoe store in 1901 by John Nordstrom, the company has since grown into a luxury retail giant with over 350 locations nationwide. Despite its storied history, Nordstrom has struggled to navigate the evolving retail landscape, prompting the family to pursue privatization once more.
Partnering with Liverpool, Mexico’s second-largest department store operator, represents a calculated effort to inject fresh resources and perspectives into the business while preserving its legacy.