PRECEDENTS POOR AS NORDSTROM WEIGHS GOING PRIVATE

Nordstrom Inc. shareholders are applauding a plan by its founding family to consider taking the department-store chain private. But there are few recent examples of retail buyouts that went smoothly, raising questions about how the family could raise sufficient funds to execute a deal — and whether it should even try. Retailers like J. Crew Group Inc. and Neiman Marcus Group Inc. went private in leveraged buyouts, hoping to re-emerge with an initial public offering. The IPOs were both scrapped after mall traffic dwindled and sales dropped off. Other former LBOs are in even worse shape: Claire’s Stores Inc., Gymboree Corp. and True Religion Apparel Inc. have all been foundering. Other, healthier chains such as Best Buy Co. have attempted to do buyouts in recent years and failed, said Michael Binetti, a UBS analyst. “We’re cautious about a department store’s ability to secure a bid of this magnitude, given the structural headwinds facing the sector today,” he said in a report. And the debt load required would make the Nordstrom deal “quite risky,” Binetti said.