Department store chain Nordstrom has been acquired by its founding family and Mexican retailer Liverpool in an all-cash deal for nearly $4 billion, taking it private at a time when luxury retailers are grappling with weak demand.
Nordstrom announced Monday that its shareholders will receive $24.25 for each share they own, an increase from the $23 offer the parties made in September for shares they don't already own. It's a thing.
The Nordstrom family will retain a majority stake of 50.1% in the company, with the remaining 49.9% controlled by El Puerto de Liverpool, Mexico's second-largest department store retailer.
“For more than a century, Nordstrom has operated on the core principle of helping customers feel good and be their best.” Nordstrom CEO Eric Nordstrom said in a press release.
“Today marks an exciting new chapter for our business, and on behalf of my family, I look forward to working with the team to ensure Nordstrom thrives into the future.”
The transaction has an enterprise value of $6.25 billion, including debt, and will be funded in part by up to $450 million in debt under a new $1.2 billion asset-based bank loan.
The transaction is expected to close in the first half of 2025, the company said.
Nordstrom stock fell more than 1% in morning trading Monday.
Department store chains such as Nordstrom and Macy's are seeing middle-income shoppers turn to frugality as prices for essential goods soar, and instead opting for cheaper options at off-price chains like Walmart, Amazon.com, Target and TJ Maxx. The company has struggled to increase sales as it has turned to alternative products.
The Nordstrom family attempted to take the company private in 2018, offering $50 a share to buy the company, which was valued at $8.4 billion at the time.
However, the company's board of directors rejected this proposal as inappropriate. In September, the family tried again. This time, it teamed up with Liverpool to offer shareholders a deal at a valuation of $3.76 billion and $23 per share.
At the time of the offer, the Nordstrom family owned approximately 54.6 million shares, or 33.4% of the company's stock. Liverpool held 15.8 million shares, nearly 10%.
Nordstrom's has long believed that taking the company private would allow it to make long-term investments and transform the company without the pressure and scrutiny that comes with quarterly earnings reports.
The chain was founded as a shoe store in 1901 by John Nordstrom, the great-grandfather of current CEO and president Eric Nordstrom.
The company has grown into a luxury retailer selling clothing and accessories in more than 350 stores nationwide.
El Puerto de Liverpool operates two other department store chains, Liverpool and Suburbia, and owns 29 shopping centers across Mexico.
Nordstrom stock has risen more than 32% since the beginning of the year.
But the company's chief financial officer said in a recent earnings call with analysts that “the external environment is “It remains uncertain,” he warned. Shane and Tem.
Inventories increased 6% at the end of the third quarter, outpacing the 5% increase in sales.
The company's president, Pete Nordstrom, said part of the increase was due to weaker sales of seasonal products such as boots, sweaters and outerwear in certain regions, adding that the company has carefully selected sweaters and luxury fragrances for the holiday season. he added.
Morningstar analyst David Swartz said the slowing sales trend Nordstrom saw in late October could indicate “a poor outlook for the holiday season.”
However, the company beat expectations for third-quarter sales and profits thanks to popular brands such as On Running, Hoka and Vuori.
with post wire
