The coronavirus continues to hit retail hard. Nordstrom is extending store closures in the U.S. and Canada until April 5. After that, the Seattle-based retailer will furlough a portion of corporate employees for six weeks.
“We are taking action across our business to respond to the challenges we are facing today and to best position Nordstrom for our employees, customers and shareholders. We have a responsibility to protect the health of our people, while also preserving our long-term ability to offer jobs and benefits to our employees. The decisions we make are with that in mind,” said Erik Nordstrom, CEO of Nordstrom Inc. in a statement.
The company has been paying store employees during the shutdown and will continue to provide pay and benefits through April 5. Company banners include Nordstrom, Nordstrom Rack, Trunk Club, Jeffrey, Nordstrom Local and Last Chance.
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The retailer did not specify the number of corporate staff impacted by the furloughs, but said the company will require a smaller workforce to execute critical activities during this period. (The affected team members will continue to receive benefits.)
“This is the most difficult decision we have made in our company’s long history. Through our 119 years, our company has faced many challenges, but these are unprecedented times,” Nordstrom said.
Erik and Pete Nordstrom will decline their own salaries from April to September, and the executive leadership group will forgo a part of their salaries as well. In addition, all members of the company’s board will not take cash compensation for a six-month period.
The moves come after the company said Monday 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–$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.