Nordstrom and El Puerto de Liverpool’s announcements Monday of their go-private deal valued at $6.3 billion made retail waves as the Seattle department store chain seeks a turnaround outside of the public markets.
The heads of the Nordstrom family – CEO Erik Nordstrom, President and Chief Brand Officer Pete Nordstrom and Chief Merchandising Officer Jamie Nordstrom – signed off on a joint message Monday calling the deal approved by the Nordstrom Board of Directors “a new chapter.”
While Nordstrom’s struggles, particularly with its luxury and contemporary business, have been well documented by the U.S. press, not as much is known about El Puerto de Liverpool.
The Mexico-based retailer, started 176 years ago by Jean Baptiste Ebrard as a single Liverpool store, will hold a 49.9 percent stake in the business if the deal is approved and closes in the first half of 2025. That would significantly expand El Puerto de Liverpool’s U.S. footprint overnight.
The transaction pencils out to $24.25 a share with an enterprise value on the deal of $6.3 billion.
El Puerto de Liverpool, which became a Nordstrom minority investor in 2022 before ramping its stake to 9.7 percent, said in a disclosure Monday it will provide as much as $1.7 billion in debt and equity for the acquisition. Part of that will be an $861 million loan provided for a seven-year term at a 12 percent to 16 percent interest rate.
Additional details on the financing will be disclosed at a later date, the company said.
El Puerto de Liverpool said it will also provide as much as $851 million in capital.
El Puerto de Liverpool Business Breakdown
El Puerto de Liverpool holds many similarities to the Nordstrom business on the retail operations end.
The company, led by CEO Graciano F. Guichard G., has a store portfolio that includes Liverpool. The chain sells men’s, women’s and children’s apparel in addition to home and cosmetics. There’s also Suburbia, which is focused on affordability across men’s, women’s and kids.
The Liverpool banner ended 2023 with 124 stores. That was unchanged from 2022, according to the company’s annual report. Meanwhile, the growing Suburbia chain has found success in more recent years among value-conscious consumers. It grew 3.9 percent year-over-year to 186 stores in 2023.
El Puerto de Liverpool is also an operator of Gap, MAC, Banana Republic, Pottery Barn and other brands’ stores in Mexico, with that business counting 116 doors.
Like many department stores, the company’s Liverpool and Suburbia chains offer credit cards. In 2023, the credit business had 7.3 million card users, the annual report said.
Credit card revenue saw the greatest jump last year of 23.2 percent to $807.2 million, based on current exchange rates.
Unlike Nordstrom, El Puerto de Liverpool is also in the commercial real estate business as the owner of malls.
It counts 28 shopping malls, with nearly 5.4 million square feet of leasable space. The company said in its 2023 annual report occupancy at these centers – a key measure indicating how much of a property’s space is leased – grew from 2022 by two points to 92.3 percent.
Companywide revenue jumped 11.3 percent in 2023 to $9.7 billion. Revenue from the retail business alone was $8.7 billion in 2023, up 10.1 percent from the prior year.
Net income grew by 12.1 percent to $966.9 million.
Be First to Comment