new York
CNN
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Nordstrom, the upscale department store chain, is going private in a $6.25 billion deal with its founding family.

The retailer announced Monday that the family – Erik, Pete and Jamie Nordstrom – and Mexican department store chain El Puerto de Liverpool will acquire the remaining shares they do not own, giving the family a majority stake in the 123-year-old company. old company.

Shareholders will receive $24.25 in cash for each share, representing an approximately 42% premium to the stock based on the price on March 18, 2024, when speculation about Nordstrom’s (JWN) privatization began. The stock fell 1% in early trading and is up more than 30% for the year.

“For over a century, Nordstrom has operated with the core principle of making its customers feel and look good,” CEO Erik Nordstrom said in a press release. “Today marks the start of an exciting new chapter for the company. On behalf of my family, we look forward to working with our teams to ensure Nordstrom continues to thrive well into the future.”

Nordstrom’s founding family tried to delist the retailer for $50 a share in 2018, but the board said that was too low a price. Monday’s announcement marks a stunning decline from the company’s pre-pandemic peak, with its shares having been worth about half since then.

Like other department stores, Nordstrom has suffered as consumers reduced their discretionary spending and shifted their habits to online competitors like Amazon or rental startups like Nuuly. In July, Saks Fifth Avenue and Neiman Marcus announced a merger that would give them more leverage in negotiating lower costs with luxury brands.

Neil Saunders, managing director of GlobalData, praised the change in a note, writing that the family and its supporters “can make necessary investments and changes without subjecting themselves to the short-term scrutiny of public markets.”

“The family has the talent and ability to bring about change, as does El Puerto de Liverpool. They will likely run the business as a retailer rather than some kind of financial play, which we think is a very positive thing for the long-term health of the brand,” Saunders said.

Department stores are at a crossroads as rivals Macy’s and Bloomingdale’s come under pressure from investors who believe the companies’ real estate may be more valuable than their retail stores. So far, Macy’s has shrugged off attempts by activist investors to bring about big change.

The Nordstrom deal, expected to close in early 2025, must be approved by two-thirds of the company’s common shareholders.