Luxury department store chain Nordstrom is going private in a $6.25 billion deal, the company just announced. “Today, the Nordstrom Board of Directors announced that it has approved an agreement under which members of our family, together with El Puerto de Liverpool, will acquire Nordstrom and operate it as a private company,” Nordstrom said in an email to their customers on December 23, 2024. “Liverpool is a retail company that has been an investor in Nordstrom since 2022. Following the close of the transaction, our family will have a majority ownership stake in the Company. This announcement marks a significant milestone, and we are excited by the potential opportunities it brings.” Here’s what the new deal could mean for the brand, and their shoppers, moving forward.
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Majority Ownership
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The Nordstrom family will own 50.1% of the company, and Liverpool will own 49.9% in the new deal approved by the board. “For over a century, Nordstrom has operated with a foundational principle of helping customers feel good and look their best,” Nordstrom CEO Erik Nordstrom said in a press release. “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.”
Previous Attempt
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Nordstrom previously tried to go private in 2018, but it didn’t work out. With the new deal, Nordstrom shareholders will receive $24.25 per share in cash, the company says. “We’re grateful to the employees, customers and shareholders who have shaped Nordstrom into the company it is today,” said Pete Nordstrom, chief brand officer of Nordstrom. “Since our founding in 1901, we have been committed to providing our customers with the best possible service – and to improving it every day. We look forward to building on that commitment in this next phase of the Company’s evolution.”
What Will Change?
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There won’t be major changes right off the bat, experts say. “Nothing should really change,” research analyst John Harmon tells Seattle Magazine. “However, it’s likely that Nordstrom would make some changes and cost cuts after going private. The company would save the costs of being public, like investor relations and exchange fees. Privately held companies also have more freedom to make changes, since they do not need to seek shareholder approval.”
When Is the Deal Going Through?
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The deal is expected to close in the first quarter of 2025. “The transaction will be financed through a combination of rollover equity by the Nordstrom Family and Liverpool, cash commitments by Liverpool, up to $450 million in borrowings under a new $1.2 billion ABL bank financing, and Company cash on hand,” the company says.
What’s Next For Shoppers?
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Customers should continue to enjoy Nordstrom’s retail approach of brands first, price second.”For over a century, Nordstrom has operated with a foundational principle of helping customers feel good and look their best,” Erik Nordstrom says. “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.”