Nordstrom is currently in the process of being taken private by the Nordstrom family and El Puerto de Liverpool, a Mexican retail company. The deal, valued at $6.25 billion, is expected to close in the first half of 2025, pending regulatory approvals. Once finalized, the Nordstrom family will own 50.1% of the company, while Liverpool will own 49.9%.
Nordstrom, Inc. is a luxury department store chain based in Seattle, Washington. The company was founded in 1901 by John W. Nordstrom and Carl F. Wallin as a shoe store. Over the years, it expanded into clothing and accessories and became a full-line retailer by 1971. Today, Nordstrom competes with other high-end stores like Bloomingdale’s, Macy’s, Neiman Marcus, and Saks Fifth Avenue. The company also operates Nordstrom Rack, an off-price division launched in 1973, which competes with discount retailers like TJ Maxx and Ross Stores.
The Nordstrom Family’s Role in Ownership
The Nordstrom family has been deeply involved in the company since its founding. Over the years, family members have held key leadership positions:
- In 2000, Bruce A. Nordstrom’s sons Blake, Erik, and Peter Nordstrom took on senior roles.
- By 2015, Erik and Peter joined Blake as co-presidents.
- Blake Nordstrom passed away in 2019, leaving Erik and Pete to continue leading the company.
- The Nordstrom family previously owned 33.4% of the company before the 2024 privatization deal.
Liverpool’s Investment in Nordstrom
El Puerto de Liverpool is Mexico’s largest department store chain and one of the country’s top five retailers, alongside Walmart, Oxxo, Sorianna, and Coppel. The company operates over 300 stores, including 124 Liverpool stores and 188 Suburbia locations. Liverpool also runs nearly 120 U.S. brand stores in Mexico, including Gap, Banana Republic, Williams Sonoma, Pottery Barn, and MAC Cosmetics.
Liverpool first acquired a 9.6% stake in Nordstrom in 2020. With this new deal, it will increase its stake to 49.9%, investing $3.8 billion at $23 per share. This marks Liverpool’s first major expansion into the U.S. market.
Why Is Nordstrom Going Private?
Nordstrom has faced financial challenges in recent years, with revenue dropping from $15.1 billion in 2019 to $14.2 billion in 2023. In early 2024, Nordstrom Rack saw a 14.6% sales increase, but the main Nordstrom brand had a 3% decline.
By going private, CEO Erik Nordstrom and President Pete Nordstrom hope to focus on long-term strategy without the pressure of public shareholders and quarterly earnings reports. A special committee of independent board members is currently reviewing the deal to ensure fairness for all shareholders.
Past Attempts to Take Nordstrom Private
The Nordstrom family has tried to take the company private before:
- In 2017, they explored a buyout with private equity firms but failed due to financing issues.
- In 2018, a special committee rejected the bid, citing an insufficient offer.
- In 2024, with Liverpool as a co-investor, the family is making another attempt to regain full control of the company.
What’s Next for Nordstrom?
If regulators approve the deal, Nordstrom will transition from a publicly traded company to a privately owned business split between the Nordstrom family and Liverpool. The company will continue operating its department stores and Nordstrom Rack locations but will have more flexibility to make strategic changes.
FAQs-
Q: Is Nordstrom still a public company?
A: Currently, yes. However, the company is in the process of being taken private by the Nordstrom family and Liverpool, with the deal expected to close in 2025.
Q: Who will own Nordstrom after the deal?
A: The Nordstrom family will own 50.1%, and El Puerto de Liverpool will own 49.9%.
Q: Why is Nordstrom going private?
A: The company wants to focus on long-term growth without the pressure of public shareholders and quarterly earnings expectations.
Q: What does Liverpool gain from this deal?
A: Liverpool expands into the U.S. market, strengthening its position as a global retail player.
Q: Has Nordstrom tried to go private before?
A: Yes, the Nordstrom family attempted a buyout in 2017 and 2018 but was unsuccessful. The current deal with Liverpool provides better financial backing.
This privatization marks a significant shift for Nordstrom, ensuring the company remains under family control while partnering with a major international retailer.