Nordstrom family suspends attempts to take company private this year

Craig F. Walker | The Denver Post | Getty Images

Members of the Nordstrom family told the department store’s board that the group has suspended for the balance of this year, their efforts to take the retailer private.

The Nordstrom family said it plans to continue its efforts after the conclusion of the holiday season.

Nordstrom shares fell more than 5 percent in premarket trading Monday after the news was reported.

The Nordstrom family group, which owns 31.2 percent of the 116-year-old retailer, said in June it was looking to take Nordstrom private. It sought to take the department store private in order to get out of the eye of punishing public stock holders and make necessary investments for the retailer’s long-term plans.

It had been in talks with private equity firm Leonard Green to provide equity financing on the deal, CNBC earlier reported, but had trouble completing a financing package for the deal, sources previously told CNBC.

Banks over past couple of months have become skittish as the retail landscape has worsened and were wary of difficulties in syndicating the debt, reminiscent of banks’ struggles with Sycamore Partners’ $3 billion purchase of department store operator Belk.

Leonard Green, on the other hand, likewise has limits in the amount of equity it was willing to put in and the debt financing rate it was willing to swallow, the sources said.

The holiday season served as an informal deadline for all financing parties, because banks tend to avoid syndicating debt during the the unpredictable holiday season.

Several private equity-backed retailers have buckled under the weight of large debt loads that have hampered their ability to invest in e-commerce and adapt to the rapidly changing retail industry. Private equity-backed Payless ShoeSource and Gymboree filed for bankruptcy earlier this year, while Neiman Marcus is currently working with restructuring advisors.

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