The search is over—for now.
The Nordstrom family group, which had hoped to take the eponymous retailer private, has suspended its efforts. The Nordstrom special committee that had been formed to act on behalf of the retailer, announced the group has tabled the idea for the balance of the year.
After the holidays wrap up, the Nordstroms plan to continue exploring their options.
In June, co-presidents Blake W. Nordstrom, Peter E. Nordstrom, and Erik B. Nordstrom, President of Stores James F. Nordstrom, Chairman Emeritus Bruce A. Nordstrom, and Anne E. Gittinger—who collectively hold about 30 percent of the retailer’s stock—announced they were exploring options for taking the company private.
The development was seen as an attempt to allow the family to make changes to the business with an eye toward long-term growth without having to answer to shareholders, who have demanding short-term expectations.
Things were looking promising at one point, when news circulated the group had hooked Leonard Green & Partners as a partner. In addition to the private equity firms’ $1 billion contribution, the family was looking to raise another $6.5 billion in financing. Landing the additional financing, though, had reportedly been a challenge given the current state of retail.
Two weeks ago, the New York Post reported the deluge of bad press surrounding retail, most recently thanks to the Toys R Us bankruptcy, was impacting Nordstrom. With the holidays looming and the only offers on the table coming with sky high interest rates attached, the paper said a deal was unlikely to materialize.
Despite the challenges related to going private, Nordstrom has been able to weather the retail storm better than many of its competitors, a fact the company attributes to its off price sales, which through HauteLook and Nordstrom Rack represents 30 percent of overall sales, and its e-commerce business, which now contributes a quarter of sales.