Nordstrom Goes Private in $6.25 Billion

When you’re a 122-year-old retailer facing a 70% stock drop since 2015, what’s the next move? If you’re Nordstrom, it’s going private. The Nordstrom family, in partnership with Mexican retail powerhouse El Puerto de Liverpool, has struck a $6.25 billion deal (including debt) to buy out the iconic retailer. Shareholders will receive $24.25 per share in cash, representing a 42% premium from March 18, the day before whispers of the deal began circulating. The transaction, expected to close in the first half of 2025, will leave the Nordstrom family with a 50.1% majority stake and Liverpool holding 49.9%. “For over a century, Nordstrom has been helping customers feel good and look their best,” said CEO Erik Nordstrom. “Today marks an exciting new chapter for the business.”

From Golden Days to Tough Times

Let’s call it like it is—department stores are facing some serious headwinds. Once a retail powerhouse, Nordstrom peaked with annual revenues of $15.9 billion in fiscal 2019. But the pandemic’s impact and sluggish recovery have taken their toll, with fiscal 2024 revenue projected at $14.9 billion. Nordstrom isn’t alone in its struggles. Inflation, rising input costs, and shifting consumer habits have driven shoppers to budget-friendly options like T.J. Maxx or the ever-dominant Amazon. Even Nordstrom Rack, its off-price chain, saw bumps in the road when it briefly reduced high-end brand availability—a misstep it has since corrected with improved sales.

This isn’t Nordstrom’s first attempt at going private. In 2018, the family offered $50 per share in an $8.4 billion bid, only to have it rejected as too low. Now, the current offer reflects a vastly changed retail environment, one that demands a fresh approach.

Why Liverpool Fits Nordstrom’s Vision

The Nordstrom family isn’t going at it alone. They’ve brought in El Puerto de Liverpool, Mexico’s second-largest department store operator, to back the deal. With 29 shopping centers and multiple retail chains in Mexico, Liverpool knows a thing or two about keeping department stores alive and thriving. This partnership isn’t Liverpool’s first rodeo. The company has expanded beyond Mexico in the past, dabbling in acquisitions across Latin America. With Nordstrom, Liverpool is betting on its ability to gain a foothold in the U.S. market—a high-stakes opportunity that could define its global ambitions. Neil Saunders, a retail analyst at GlobalData, summed it up: “The family and Liverpool will likely run the business as a retailer rather than a financial plaything, which is a very positive thing for the long-term health of the brand.”

A Fresh Start or More of the Same?

 For starters, it gives Nordstrom the breathing room to make bold moves without worrying about Wall Street’s short-term expectations. Unlike public companies that live and die by quarterly earnings, private companies can think years ahead. Analyst Neil Saunders puts it bluntly: “This deal lets the family and Liverpool focus on running Nordstrom like a retailer, not a financial chess piece.” But it’s not all smooth sailing. Department stores have been a tricky business in recent years. Even high-profile peers like Macy’s and Saks Fifth Avenue have been grappling with falling sales and changing consumer habits.

What’s Next for Nordstrom?

The deal’s financing structure includes $450 million in new borrowings under a $1.2 billion asset-based loan, equity contributions from the Nordstrom family and Liverpool, and company cash on hand. To sweeten the pot, the board has approved a special dividend of up to $0.25 per share, contingent on the deal’s closing. Morgan Stanley, Centerview Partners, and Moelis & Company are advising on the transaction, which is expected to close in the first half of 2025. Once completed, Nordstrom will officially return to private ownership, allowing the family and Liverpool to steer the company toward long-term growth.

A Family Legacy Renewed

Nordstrom’s decision to go private is more than just a financial play, it’s a bet on its ability to adapt in a retail market that’s evolving faster than you can say “Prime Day.” While challenges remain, the move reflects a long-term vision to re-energize the brand and remind consumers why Nordstrom became an icon in the first place. As the family steps back into the driver’s seat and Liverpool joins the journey, one thing is certain: Nordstrom isn’t done making its mark. Whether this deal leads to a retail renaissance or another uphill battle, it’s a chapter worth watching. Stay ahead of the curve! Subscribe to MYCPE ONE Insights for the latest in finance, accounting, and corporate news delivered straight to your inbox.