Nordstrom Inc. has decided that the stock market is, in fact, not their problem anymore. The Seattle-based retailer announced Monday that it’s going private in a $6.25 billion all-cash buyout orchestrated by the Nordstrom family and Mexican retailer El Puerto de Liverpool. For shareholders still clutching their dwindling dreams of department store glory, the deal delivers $24.25 per share, a tidy 42% premium over the pre-buyout buzz price.
The timing is… let’s call it interesting. Nordstrom stock is up over 30% year-to-date, a rare glimmer of hope in the haunted house of retail. But zoom out, and you’ll see a five-year decline of more than 40%, as the company struggled to convince investors that being a fancy department store is still a viable business model. Apparently, convincing wasn’t working, so the Nordstrom brothers Erik and Pete and their cousin Jamie decided it was better to play keep-away with Wall Street.
And why not? Running a department store in the middle of a brick-and-mortar retail apocalypse might actually be less stressful without analysts demanding weekly updates on how many people are still wandering into the shoe department. Plus, having Liverpool as a deep-pocketed co-owner is a nice cushion when your balance sheet starts looking as thin as an outlet store blouse.
A special Nordstrom board committee waved this deal through after deciding that cash now beats dreams later. Sprunk even threw in a parting gift: a potential $0.25-per-share dividend from whatever loose change is left in the register.
For public shareholders, it’s one last premium payday before Nordstrom sails off to the private shores of brick-and-mortar survival. For the Nordstrom family, it’s a chance to rewrite the retail playbook without quarterly earnings calls stealing all the fun