What happened

Shares of Nordstrom, Inc. (NYSE:JWN) slid today as the department store chain stepped back from plans to sell itself.

The stock closed down 5% as a result.

The exterior of a Nordstrom Rack location

Image source: Nordstrom.

So what

The high-end retailer sold off after reports said the buyout discussions it was having were "informal," throwing cold water on investor hopes for a sale. According to Women's Wear Daily, bankers interested in lending to Nordstrom said that the window for such a deal to take place was narrowing.

Nordstrom did not comment on the news, but investors seem to be interpreting the report as a sign that the company is having trouble finding a buyer or that the founding family, which expressed a desire to go private, is unable to get funding.

Now what

Reuters had reported last week that the Nordstrom family would offer preferential terms to private-equity lenders willing to fund a buyout. However, after today's news, it seems that no buyout is near.

Nordstrom has been doing a better job than its department-store peers in adapting to the e-commerce era, as it's built a solid online platform and expanded its off-price Rack brand. However, comparable sales at its full-line stores continue to fall steadily. Taking the company private may make it easier to rehabilitate those stores and the overall performance, but without that, Nordstrom will have to find other ways to boost online sales to compensate for the decline in its core retail format. As investor sentiment has turned against its sector, that could present problems for the stock.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Nordstrom. The Motley Fool has a disclosure policy.