Nordstrom Family Woes

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Peter, Erik, and Blake Nordstrom are struggling in their attempt to take the luxury retailer private.

With retailers going belly up left and right, the Nordstrom family decided in June it was best to keep things…in the family. But finding the right partners to help buy out the remaining $7.6 billion worth of public shares (the Nordstroms own $2.4 billion) has been no easy task. 

The Nordstrom boys thought there might be a glimmer of hope when they recruited private equity shop Leonard Greene to help out with some of the cost, but in order to cover the outstanding $6.5 billion they would need to take out a few too many “IOUs.”

Here’s the problem: with mall traffic declining and a fresh Chapter 11 from Toys “R” Us (bringing the tally to over 20 big-box retailers this year), banks aren’t exactly lining up to pump money into retail. And because of that, the deal right now “is in big trouble.”

Naturally, it didn’t take long for shares to tank 7%.

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The luxury retailer is hanging its floral rompers back on the rack after suspending its attempt to go private. The plan was part of a 2018 New Year’s resolution, but it couldn’t secure the financing to finalize the $10 billion deal.

The reason? After a series of debt lifelines failed to keep retailers like PetSmart, Staples, and most recently Toys “R” Us afloat, banks had little interest lending Nordstrom (-5.28%) a hand.