Josh Kosman and Lisa Fickenscher of the New York Post had the news:
Jitters about dwindling mall traffic dogged discussions throughout the summer, but the surprise bankruptcy filing of Toys ‘R’ Us on Sept. 23 added to the anxiety among lenders and the Nordstroms alike, insiders said.
Jitters about dwindling mall traffic dogged discussions throughout the summer, but the surprise bankruptcy filing of Toys ‘R’ Us on Sept. 23 added to the anxiety among lenders and the Nordstroms alike, insiders said.
“The financing has not worked out. I hear that the Nordstrom financing is not done and no one knows if it can be done,” a top retail industry expert with direct knowledge of the situation said, adding, “Toys R Us isn’t good for anyone.”
“This deal is in deep trouble,” a second source close to the talks said.
The Nordstrom family — whose fourth-generation brothers Blake, Erik and Peter currently run the company as co-presidents — reached an agreement in principle last month to sell preferred shares to private-equity firm Leonard Green & Partners to support the buyout.
Charisse Jones of USA Today reports that the retailer has experimented to keep sales strong:
CNBC reported last month that the Nordstrom family was likely to pick Leonard Green & Partners, a private equity firm, to give about $1 billion toward the deal. Sources also told the network that talks were underway to secure between $7 billion and $8 billion from lenders.
Unlike many of its peers, Nordstrom, known for its signature personal service, has continued to be profitable. But it’s also recognized the need to experiment with the in-store experience while ramping up the conveniences shoppers have come to expect from shopping online.
This month, the retailer is opening a store dubbed Nordstrom Local in West Hollywood. The shop will be smaller than a typical Nordstrom location, and rather than having clothing in stock, it will instead feature personal stylists, alterations, and even manicures, along with wine and beer.
Nordstrom began in 1901, when John W. Nordstrom, and Seattle shoemaker Carl Wallin opened a shoe store. Decades later, in the 1960’s, the shoe retailer also began to sell women’s clothing.
Lindsey Rupp of Bloomberg News reported that the company’s stock fell as much as 7 percent on the news:
The shares fell as much as 7 percent to $43.87, the most intraday since May 12, in the wake of the report. Nordstrom was down 1.6 percent this year through the end of last week.
While Nordstrom’s sales have slowed, the chain has generally performed better than most large U.S. competitors. Macy’s Inc., J.C. Penney Co. and Sears Holdings Corp. have plans to close hundreds of stores as they cope with slow mall traffic and consumers shift spending online.
Representatives for the family and the company didn’t immediately respond to request for comment.
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