As the coronavirus continues to batter retail across the board, Nordstrom is cutting half a billion dollars from its spending plan.
In a statement yesterday, the Seattle-based company said that it was making reductions of more than $500 million in operating expenses, capital expenditures and working capital, in addition to its “ongoing efforts to realign inventory to sales trends.” Nordstrom had previously disclosed plans to trim $200 to $250 million in costs during the 2020 fiscal year.)
It also announced that it would draw down $800 million on its revolving credit facility, as well as suspend its cash dividend and share repurchases.
“During this time of great uncertainty, we’re making decisions to best position Nordstrom for our employees, customers and shareholders,” said CEO Erik Nordstrom. “We are proactively taking steps to strengthen our financial flexibility to help us navigate through this unprecedented situation.”
Further, Nordstrom is exploring options to raise additional capital to strengthen its balance sheet, which included $853 million in cash at the end of fiscal 2019.
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The announcement came a week after the retailer said it was temporarily shuttering all 380 of its department stores and off-price Nordstrom Rack outposts in an effort to prevent the spread of COVID-19, which now has more than 46,000 confirmed cases in the United States. During the two-week period, it has continued to pay store employees and provide full benefits.
Customers are still able to shop Nordstrom’s online business, which represented one-third of the company’s sales at the end of 2019. It added in yesterday’s press release that e-commerce sales are currently helping to “partially” mitigate the impact from the store closures.
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