Nordstrom family and Mexican retail group buying department store in $6.25 billion agreement

SEATTLE — The century-old retail giant Nordstrom has accepted an offer to be bought out and taken private by members of the Nordstrom family and a Mexican retail conglomerate in a deal valued at $6.25 billion. This move comes as the retail industry faces intense competition from discount chains and other rivals.

Being a publicly traded company subjects Nordstrom to considerable scrutiny. By going private, Nordstrom may find more flexibility in revitalizing its department store chain, which has been striving to boost its sales for several years.

As part of the acquisition deal, Nordstrom shareholders will be compensated $24.25 in cash for each share of Nordstrom common stock they own, totaling around $4 billion altogether. This offer represents a 42% premium on the company’s stock price as of March 18, the date when reports first emerged about a potential acquisition.

The acquiring group will also pick up more than $2 billion in Nordstrom debt.

The traditional department stores have suffered in the face of withering competition from giants like Walmart and Target, as well as a host of fast-fashion bands and Amazon.com. Nordstrom rivals Macy’s and Kohl’s have been pressured by major investors to make huge changes in order to return more profit to shareholders.

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Sales at Nordstrom have essentially flatlined over the past decade or so and it announced last year that it was closing all of its Canadian stores and cutting 2,500 jobs as it winds down operations in the country. Nordstrom first announced plans to expand to Canada in 2012 and opened its first store in Calgary at CF Chinook Centre in September 2014.

The offer announced Monday tops the previous $23-per-share bid that the Nordstrom family and Mexican retail group, El Puerto de Liverpool, made in September.

The board also plans to authorize a special dividend of up to 25 cents per share, based on Nordstrom’s cash on hand immediately prior to and contingent on the close of the transaction.

The deal is expected to close in the first half of 2025, at which time the company’s shares will no longer trade publicly.

“While a change in ownership does not automatically remedy all of the problems with the department store operation, it will allow the family and their backers to take a long-term view of the business and make necessary investments and changes away from the short-term scrutiny of public markets,” wrote Neil Saunders, Managing Director of GlobalData, in a note to clients.

Nordstrom’s board of directors unanimously approved the the proposed transaction, with members Erik and Pete Nordstrom, part of the Nordstrom family taking over the company – recusing themselves from that vote.

Following the close of the transaction, the Nordstrom family will have a majority ownership stake in the company.

Erik and Pete Nordstrom are the fourth-generation leadership at the Seattle retailer, which was founded in 1901 as a shoe store. Erik is the company’s chief executive and Peter is president.

After opening 23 new stores so far this year, the company now operates a combined 381 Nordstrom and Nordstrom Rack stores in the U.S.

Nordstrom shares fell about 1.5% Monday, but they are up 34% this year on rumors of a family takeover. The company’s stock is still down considerably from post-pandemic highs above $40 per share.

In May of this year, Bruce Nordstrom, a retail executive who helped expand his family’s Pacific Northwest department store chain into an upscale national brand, died at age 90. He was one of several Nordstrom family members who in 2017 made a push to take the company private, proposing to buy out the 70% of the department store’s stock they didn’t already own. Those talks failed in 2018 but earlier this year, his sons started another series of buyout negotiations, leading to Monday’s announcement.