Nordstrom Agrees to Become Private Company After $6.25 Billion Buyout Deal
Nordstrom, the iconic American department store chain, is set to become a private company after its board of directors approved a buyout deal valued at approximately $6.25 billion. The company’s founding family and Mexican department store El Puerto de Liverpool are behind the proposed transaction, which is expected to close in the first half of 2025.
Under the terms of the deal, the Nordstrom family will hold 50.1% majority ownership, while El Puerto de Liverpool will own 49.9%. Common shareholders will receive $24.25 in cash for each share of Nordstrom common stock they hold.
This deal marks a fresh start for Nordstrom, which has been battling declining sales in recent years due to increased competition from online retailers and changing consumer habits. In November, the company reported that revenue grew by 4% year over year, but maintained a cautious sales forecast for the full year. The company attributed the soft performance to a slowdown in the luxury clothing market and a challenging holiday season.
As part of its efforts to reinvent itself, Nordstrom previously attempted to go private in 2018 but was unsuccessful. The company also faced pressure during the pandemic due to store closures and reduced shopping traffic.
Following the announcement of the buyout deal, Nordstrom’s shares fell by 1% in early trading, but the news has been largely well-received by investors and analysts. Under private ownership, Nordstrom’s management will be able to implement changes and initiatives without the pressures of quarterly earnings reports and a focus on stock price.
As the company moves forward, CEO Erik Nordstrom expressed optimism, stating that “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.” The deal is pending regulatory approval and is expected to close in 2025.
