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DealBook|Nordstrom Family Offers $3.8 Billion to Buy Its Namesake Retailer
https://www.nytimes.com/2024/09/04/business/dealbook/nordstrom-retailer-private.html
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The $23-per-share offer by the department store’s founding family comes as retailers struggle to navigate new shopping trends and costly real estate.
Sept. 4, 2024, 12:06 p.m. ET
The family behind Nordstrom, one of the country’s oldest department stores, is offering to take it private for $3.8 billion, the company announced in a regulatory filing on Wednesday, as retailers struggle to navigate new shopping trends and their costly store bases.
Erik Nordstrom, the chief executive, and his brother Pete Nordstrom, the executive vice president, are leading a group of investors that is proposing to acquire Nordstrom for $23 a share in cash. The two are the fourth generation of Nordstroms to head the store, founded in Seattle in 1901. The offer is subject to shareholder approval.
Department stores are adjusting to customers who are spending less on discretionary purchases like dresses and handbags, main categories for the stores. Inflation, dwindling foot traffic at malls and the race to compete continue to weigh on the sector. It’s led some to consolidate; Macy’s, the country’s largest department store chain, is looking to shrink itself, with plans to close 150 stores over the next three years.The parent company of Saks Fifth Avenue in July announced plans to acquire Neiman Marcus in a $2.65 billion deal.
Nordstrom was thought to be better situated to navigate the challenges facing retailers, given its premium real estate and reputation for high-touch customer service. But it struggled last year amid patchy performance at Nordstrom Rack, its off-price business, even as inflation-weary consumers looked for deals.
Shares of Nordstrom are up 25 percent since the start of the year, but down nearly 27 percent over the past five years. The family’s offer is a nearly 35 percent premium to its closing price on March 18, the day before news first leaked that the family was considering a deal to acquire the company. But the offer is less than 1 percent higher than Tuesday’s closing price.
The retailer has formed a special committee of directors to evaluate the deal. The committee confirmed receipt of the proposal on Wednesday, saying it would seek an outcome in the best interests of both Nordstrom and its shareholders.