It appears that retailer Nordstrom will remain on the public markets after all, as members of the Nordstrom family have informed the board they have suspended efforts to take the retailer private for the remainder of the year.
According to reports from CNBC, Nordstrom shares were down 5 percent in premarket trading following the news.
The Nordstrom family directly controls 31.2 percent of the 116-year-old retail firm and has been seeking an avenue to take the chain private since June, CNBC reported. An independent special committee to evaluate the offer was retained, and the goal was to help Nordstrom make investments geared toward helping it evolve along with the rapidly shifting environment — without concern for shareholder reaction.
It had seemed as though private equity firm Leonard Green would provide equity financing on the deal, CNBC reported, but that deal never quite came together. There has been widespread concern that the retail landscape has made both banks and private equity skittish about a big retail investment like Nordstrom.
The holiday season served as an informal deadline for all debt financing parties, because banks tend to avoid syndicating debt during the unpredictable holiday season, according to CNBC.
Nordstrom is not the only big name retail player to face this problem. Hudson’s BayCompany — the parent firm behind retailers Saks and Lord & Taylor — has reportedly been trying to raise equity to finance going private, and that the attempt to do so has been something of a struggle.
Private equity has been hit hard by retail weakness of late. Private equity-backed Payless ShoeSource and Gymboree filed for bankruptcy earlier this year, while Neiman Marcus is currently working with restructuring advisors, according to CNBC.