Nordstrom announced on Monday that it will be transitioning to a private company following an agreement on a buyout deal worth approximately $6.25 billion. The deal involves the Nordstrom founding family and Mexican department store El Puerto de Liverpool. The company’s board of directors has given unanimous approval for the transaction, which is anticipated to be finalized in the first half of 2025.
Under the terms of the agreement, the Nordstrom family will hold a majority stake in the company, with ownership of 50.1%, while Liverpool will possess 49.9%. Shareholders of common stock will receive $24.25 in cash for each share they currently hold. Nordstrom CEO Erik Nordstrom expressed optimism about the future, 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. On behalf of my family, we look forward to working with our teams to ensure Nordstrom thrives long into the future.”
This move to become a private entity is not the first attempt by Nordstrom, as a previous effort in 2018 did not come to fruition. In September, the Nordstrom family made an offer of $23 per share for the chain, valuing the company at around $3.76 billion. The recent news of the buyout caused Nordstrom’s stock to dip approximately 1% in early trading, despite a surge in share value following reports earlier in the year indicating the family’s interest in taking the company private.
Nordstrom exceeded sales expectations set by Wall Street in November for the fiscal third quarter, with revenue showing a 4% year-over-year growth. However, the company’s full-year sales forecast remains cautious, pointing to a potentially subdued holiday season. The luxury clothing sector has been facing challenges, with retailers such as Walmart, Best Buy, and Target noting that consumers are increasingly selective about non-essential purchases, emphasizing value for money.
Established in 1901 as a shoe store, Nordstrom has evolved into a department store chain offering a diverse range of clothing and accessories through more than 350 locations including Nordstrom, Nordstrom Local, and Nordstrom Rack. El Puerto de Liverpool, on the other hand, operates two department store brands, Liverpool and Suburbia, and possesses 29 shopping centers across Mexico.
In other news, major automotive companies Honda and Nissan have initiated talks to potentially merge, with the aim of creating the world’s third-largest automaker. Additionally, a group of 13 anonymous media executives have shared their predictions for the upcoming year, offering insights into the evolving landscape of the industry. Meanwhile, iconic toy manufacturer Lego is innovating its renowned brick sets, contributing to the continued success of the toy industry amidst shifting consumer preferences.
Source: CNBC
