The Nordstrom family is taking back control of its store in a $6.25 billion deal

New York
CNN
—

Nordstrom, the upscale department store chain, is going private in a $6.25 billion deal with its founding family.

The retailer announced Monday that the family — Erik, Pete and Jamie Nordstrom — and Mexican department store chain El Puerto de Liverpool will acquire the remaining shares they do not own, giving the family a majority ownership in the 123-year-old company.

Shareholders will receive $24.25 in cash for each share, a premium of about 42% to the stock based on the price on March 18, 2024, when speculation that Nordstrom ( JWN ) was being taken private began. The stock fell 1% in early trading and is up more than 30% for the year.

“For over a century, Nordstrom has operated with a fundamental principle of helping customers feel good and look their best,” CEO Erik Nordstrom said in a press release. “Today marks an exciting new chapter for the company. On behalf of my family, we look forward to working with our teams to ensure that Nordstrom thrives well into the future.”

Nordstrom’s founding family tried to take the retailer private in 2018 at $50 a share, but the board said that was too low a price. Monday’s announcement marks a stunning drop from the company’s pre-pandemic peak, with the stock worth about half since then.

Like other department stores, Nordstrom has suffered as consumers cut back on discretionary spending and shifted their habits to online rivals like Amazon or rental startups like Nuuly. In July, Saks Fifth Avenue and Neiman Marcus announced a merger that gave them more leverage to negotiate with luxury brands for lower costs.

Neil Saunders, CEO of GlobalData, praised the change in a note, saying the family and their backers can “make necessary investments and changes away from the short-term scrutiny of public markets.”

“The family has the talent and ability to effect change, as does El Puerto de Liverpool. They’re likely to run the business as a retailer rather than as some kind of financial gamble, which we think is a very positive thing for the long-term health of the brand,” Saunders said.

Department stores are at a crossroads, with rivals Macy’s and Bloomingdale’s coming under pressure from investors who believe the companies’ real estate may be more valuable than retail. Macy’s has so far shrugged off attempts by activist investors to make major changes.

The Nordstrom deal, which is expected to close in early 2025, is subject to approval by two-thirds of the company’s common stockholders.