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Luxury department store chain Nordstrom will transition to private ownership.

Nordstrom family members and Mexican retailer El Puerto de Liverpool will acquire the Seattle-based company as part of a $6.25 billion deal announced in December.

The company has a combined 350-plus Nordstrom department stores and Nordstrom Rack discount shops in the U.S. Within New Jersey, Nordstrom has nine locations. It expects to launch a 10th this spring, Nordstrom Rack at Manalapan Commons.

Following the transaction’s expected close in the first half of 2025, the Nordstrom family will own a 50.1% ownership stake and El Puerto de Liverpool will hold 49.9%. Currently, the family collectively owns 33.4% of the company, according to Digital Commerce 360.

Founded in 1901 as a shoe store, CEO Erik Nordstrom and Chief Brand Officer Pete Nordstrom helm the fourth-generation-led business.

El Puerto de Liverpool operates more than 300 stores and an e-commerce platform. It holds a 9.6% stake in Nordstrom, which the company acquired in 2022 for about $300 million, Digital Commerce 360 reported.

Better luck this time

This marks the family’s second attempt to gain full control of the business. In 2018, they unsuccessfully bid $8.4 billion to acquire Nordstrom. However, the offer was rejected because it was deemed too low.

According to Nordstrom, a special independent committee formed in February 2024 in response to the family’s interest in exploring a sale unanimously recommended the proposed transaction. Eric Sprunk, the special committee’s chairman, said the group reviewed it “against the company’s standalone prospects for growth.”

“Following a rigorous and independent evaluation and consultation with outside financial and legal advisors, the special committee unanimously concluded that this transaction offers greater value for all public shareholders at a significant premium to the unaffected share price,” he said.

Then Nordstrom’s entire board of directors, with Erik Nordstrom and Pete Nordstrom recusing themselves, backed the deal, the company said.

Erik Nordstrom shared, “For over a century, Nordstrom has operated with a foundational principle of helping customers feel good and look their best. Today marks an exciting new chapter for the business. On behalf of my family, we look forward to working with our teams to ensure Nordstrom thrives long into the future.”

El Puerto de Liverpool’s board chairman Graciano Guichard G. commented, “Nordstrom is one of the worldwide leaders in department store retailing, and we’re thrilled to be investing in a company that has meaningfully shaped the industry for nearly 125 years.”

He added, “We are honored to partner with the Nordstrom family and the company’s talented team as they continue to deliver outstanding service to customers.”

Reviving retail

Under the agreement, common shareholders will receive $24.25 in cash for each share of Nordstrom common stock, or about $4 billion in all. That represents a 42% premium on the company’s stock as of March 18, 2024, the last trading day prior to media speculation regarding a potential buyout.

Additionally, the board of directors intends to authorize a special dividend of up to .25 cents per share immediately before and contingent on the deal’s close, according to Nordstrom.

The acquiring group will also pick up more than $2 billion in Nordstrom debt.

The move comes as department store chains face increasing competition from discount retailers and online sellers, according to The Associated Press.

Since private companies are under less scrutiny than public ones, Nordstrom may have some more leeway in reviving its brand, the outlet noted. Meanwhile, Nordstrom rivals like Kohl’s and Macy’s have seen pressure by major investors to make changes in order to return more profit to shareholders.

Within the past decade, sales at Nordstrom have flatlined. In 2023, the company shuttered all of its Canadian stores.