The Nordstrom family is said to be close to choosing a private equity firm to pursue the deal to make the retailer privately owned.

(Bloomberg)—Nordstrom Inc. climbed the most in three months Wednesday on a report that private equity firm Leonard Green & Partners may help fund a buyout, setting the stage for a transaction by the retailer’s founding family.

Family members are close to picking Leonard Green to help with the deal, CNBC reported late Tuesday. The firm would provide about $1 billion to help take Nordstrom private, according to the business-news channel.

The stock rose as much as 6.5% to $47.99 in New York on Wednesday, the biggest intraday jump since June 9. Nordstrom, No. 17 in the Internet Retailer 2017 Top 500, had slid 6% this year through Tuesday’s close, hurt by a broader slump in the department-store industry. At the same time, the cost to protect against a default by the department-store chain jumped the most in three months late Tuesday on the prospect that the company could be loaded up with debt to fund a buyout.

The Nordstrom family first said it was considering a buyout in June. The idea is to continue its turnaround plan outside of the glare of public markets, giving them an opportunity to improve sales and test new concepts with less scrutiny.

Leonard Green, based in Los Angeles, declined to comment to Bloomberg News, as did a representative for the family. The company didn’t respond to a request for comment.

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The Nordstrom family group has been talking to banks about raising $7 billion to $8 billion in debt to finance the deal, according to CNBC. It’s hoping to submit a formal bid in the next couple of weeks, the channel said.

Store concept

The Nordstrom Local store will open in West Hollywood, Calif.

The report came a day after Nordstrom’s latest store concept received a chilly reception from investors. The company announced plans to open a small shop in West Hollywood, Calif., that wouldn’t keep inventory on site. The idea is to let customers try outfits and work with a stylist, but then have the merchandise delivered from another location.

The move puzzled investors, who sent the shares down as much as 5.4% on Monday.

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Though Nordstrom’s sales have slowed, it has generally performed better than most large U.S. department-store chains. Macy’s Inc. (No. 6 in the Top 500), J.C. Penney Co. (No. 33) and Sears Holdings Corp. (No. 19) have been closing hundreds of stores as they cope with slow mall traffic and a consumer shift online.

Hudson’s Bay Co. (No. 81), owner of the Saks Fifth Avenue and Lord & Taylor chains, also reported weaker results last quarter. The company suffered a deeper-than-expected loss after sluggish sales and heavy promotions took a toll on its profit margin.