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Nordstrom has entered into a $6.25 billion acquisition deal led by members of the Nordstrom family and Mexican retail giant El Puerto de Liverpool to take the retail chain private.

Why it matters

The move marks a pivotal moment for the century-old department store chain as it grapples with fierce competition in an evolving retail sector.

The deal comes at a difficult time for traditional department stores, which face increasing pressure from discount chains like Walmart, fast fashion players and e-commerce companies like Amazon.

Rivals like Macy’s and Kohl’s have been forced to consider sweeping changes under pressure from investors, while Nordstrom’s sales have largely stagnated over the past decade.

What you should know

Nordstrom has agreed to be acquired and taken private by Nordstrom family members and El Puerto de Liverpool in a $6.25 billion deal.

Shareholders of the Seattle-based retailer will receive $24.25 per share in cash, a 42 percent premium over the stock’s value on March 18, when reports of the deal first surfaced.

The acquisition also includes the assumption of over $2 billion of Nordstrom’s debt, signaling significant financial commitment from the buyers.

The Nordstrom family has long been trying to regain full control of the company after a previous takeover attempt failed in 2017. However, Monday’s announcement also tops the previous offer of $23 per share that the Nordstrom family and El Puerto de Liverpool made in September.

With this deal, the Nordstrom family and their partners aim to move the company away from the short-term pressures of public markets and toward a more flexible private ownership model.

Nordstrom announced plans last year to close its Canadian operations, close all stores in the country and cut 2,500 jobs. The company’s Canadian expansion originally began in 2012 with much fanfare.

Founded in 1901 as a shoe store in Seattle, Nordstrom has since grown into a nationwide retailer with 381 Nordstrom and Nordstrom Rack locations across the United States. Despite recent challenges, the company has opened 23 new stores this year alone.

The deal comes after the death of Bruce Nordstrom, a retail executive who helped grow his family’s Pacific Northwest department store chain into an upscale national brand. He died in May this year at the age of 90.

What people say

Neil Saunders, Managing Director of GlobalData, A note to customers said: “While a change in ownership will not automatically resolve all problems with the department store’s operations, it will allow the family and their supporters to take a long-term view of the business and make the necessary investments.” Changes away from short-term scrutiny of public markets.”

What happens next

While Nordstrom’s privately held future remains unclear, the transaction is expected to close in the first half of 2025, removing Nordstrom’s shares from public trading.

Additionally, fourth-generation family leaders Erik and Pete Nordstrom will continue at the helm, with Erik serving as CEO and Pete as president.

This article contains reporting from The Associated Press.