The Nordstrom, Inc. (NYSE: JWN) family announced that they have stopped efforts in taking the retailer private for the rest of the year with shares dropping 5% in premarket trading after the report. The family owns 31.2% of the company and had talks in looking to go private back in June while also appointing an independent special committee to evaluate the deal. If the retailer does become private, Nordstrom would be able to make investments that would help adapt to the changing retail landscape.
For this deal to happen, Nordstrom has been talking to private equity firm Leonard Green to help provide equity financing on this deal but had trouble completing a financing package for this arrangement. Over the past couple of months, banks have become hesitant as the retail landscape became worse and worse and were nervous of the difficulties in debt. Leonard Green has limits in the amount of equity it was willing to put in and the debt financing rate it was willing to take in.
Even other retailers such as Hudson’s Bay Company has been trying to raise equity to fund the company going private but is turning back on plans due to large debt loads that have hindered their ability to invest in e-commerce and adapt to the changing retail industry.