Nordstrom eases pandemic financial burden with $675 million bond sale

Nordstrom eases pandemic financial burden with $675 million bond sale

The retailer plans to use the proceeds to repay $600 million in senior secured bonds it issued last year to raise cash in the weeks before the pandemic . The new bonds will have a significantly lower interest rate and will free the properties from the liens Nordstrom used to back last year’s bonds.

 

Chief Financial Officer Anne Bramman said the additional financing further strengthened Nordstrom 's financial position following the unprecedented challenges of the pandemic .

 

Nordstrom was one of the hardest-hit companies in the retail industry when the pandemic began to spread in the U.S. Faced with closed stores and reduced apparel deliveries, especially for occasion and fashion apparel, which are part of Nordstrom’s core business, the retailer had to take extreme measures to keep merchandising .

 

With cash critical to remaining resilient through the pandemic and its initial store closures, Nordstrom along with many of its peers took on new debt.

 

At the time, Nordstrom ’s revenue was plummeting and financial markets were turbulent, forcing the retailer to attach prized assets to a $600 million bond offering last April to raise much-needed cash. The company’s debt rating also fell to the lower end of the spectrum after years of being a healthy operator in the department store space .

 

A recent Bloomberg report revealed that both the liens and the junk-rated investments are “turning points” for the Nordstrom family , which dominates the company’s board, top management and shareholder levels. Regarding the real estate used to secure the bonds, Bloomberg reported, “The Nordstrom family has historically viewed these properties as crown jewel assets and has been reluctant to hand over the liens.”

 

In this case, the new bonds give Nordstrom more control over its operations and financial destiny. In addition to lowering interest and freeing up assets, the $425 million in new bonds don’t mature until 2031, buying Nordstrom more time than last year’s bonds, which matured in 2025.

 

S&P Global Ratings raised its outlook on Nordstrom to stable from negative following the company’s debut of new bonds. Analysts at the ratings agency expect Nordstrom’s balance sheet and sales to improve as the year progresses, noting that its go-to-market strategy is bearing fruit.

 

"We believe Nordstrom will benefit from a rebound in apparel spending as consumers refresh their wardrobes throughout the year and as easing restrictions facilitate a resumption of in-person shopping," S & P analysts said. "The company's marketplace strategy enables inventory visibility across its digital and physical footprints, resulting in faster delivery times, improved product availability and higher customer engagement. "


Nordstrom

Bond Sales

Financial Burden

<<:  Canon continues to defend its rights, and 11 Chinese companies have been sued!

>>:  Levi's digital net income increased 41%, but still could not offset the 13% decline in sales in the first quarter

Recommend

What is gamingcobra? gamingcobra Review, Features

Gamingcobra focuses on developing, manufacturing a...

Exploiting platform loopholes, sellers defrauded Amazon of nearly 5 million!

For cross-border sellers, return and refund are p...

What is Rollo? Rollo Review, Features

<span data-docs-delta="[[20,{"gallery"...

Sales surged 259%! Korean men also love cross stitch

As the COVID-19 pandemic has prevented people fro...

What is PrivatBank? PrivatBank Review, Features

PrivatBank (Ukrainian Commercial Bank) is headquar...

What is 5miles? 5miles Review, Features

5miles is a well-known e-commerce platform in the...

What is kleankanteen? kleankanteen Review, Features

kleankanteen is a family-owned business on a missi...

What is Xingqian Logistics? Xingqian Logistics Review, Features

Xingqian Logistics (Guangzhou Xingqian Freight For...

What is Feilai? Feilai Review, Features

Feilai is headquartered in Shenzhen and establish...