As the fourth generation of Nordstrom Inc.'s founding familyspent the summer exploring the idea of taking the retailer privateand scouting for financing, one thing was clear: It wouldn't comecheap.

The family needed roughly $7 billion to fund the deal, andlenders demanded a steep interest rate, according to people withknowledge of the matter. After meeting at least nine differentfirms over the course of four months, the asking price came toabout 13%, said the people, who requested not to be identifiedbecause the discussions were private.

That's roughly twice the average borrowing cost for typicalretailers, and it's a rate that few otherwise-viable businesseswould be able to sustain.