The Nordstrom clan is reclaiming ownership of their retail establishment through a $6.25 billion transaction.
The company's top brass, which includes Erik Nordstrom, Pete Nordstrom, and Jamie Nordstrom, alongside Mexican department store chain El Puerto de Liverpool, declared on Monday their intention to acquire the outstanding shares they don't currently possess. This move will grant the Nordstrom family a controlling stake, making them the majority shareholders in the 123-year-old corporation.
Shareholders will be compensated with $24.25 in cash for each share, representing a significant boost of around 42% over the stock value from March 18, 2024, when whispers about Nordstrom (JWN) transitioning into a private entity started circulating. The stock dipped by 1% during early trading hours yet has experienced a surge of over 30% throughout the year.
As the CEO, Erik Nordstrom, stated in a press release: "Nordstrom has been a family business that prioritizes helping customers feel and look their best for over a century. Today, we embark on a captivating new journey for the organization. We eagerly await collaborating with our team members to secure Nordstrom's long-term growth."
The Nordstrom family attempted to acquire the retailer privately at a price of $50 per share back in 2018; however, the board deemed this price insufficient. The Monday announcement signifies a dramatic drop from the company's pre-pandemic peak, with its stock value halved since then.
Like many department stores, Nordstrom has been grappling with customers reducing their discretionary spending and altering their habits towards online retailers, such as Amazon or contemporary services like Nuuly. In July, Saks Fifth Avenue and Neiman Marcus announced their plans for a merger, granting them additional bargaining power to negotiate lower costs with luxury brand partners.
The deal is slated to complete in the early stages of 2025, requiring the endorsement of at least two-thirds of the company's common stockholders.
This acquisition will significantly increase the Nordstrom family's influence in the company's business decisions. The cash compensation for shareholders reflects the family's commitment to valuing their investors during this transition.
