Nordstrom Inc. is slimming down to strengthen its financial health as the retailer continues to be severely impacted by the coronavirus pandemic.
As part of a restructuring effort, the department store said late today it would close 16 Nordstrom locations — bringing its full-line store count down to 100. (All told, the department store currently operates 378 stores across its nameplates.) Nordstrom did not reveal the locations it plans to shutter.
In addition, the retailer is overhauling its regional structure, support roles and corporate organization in a bid to become faster and more flexible.
All told, the restructuring is expected to result in expense savings of about $150 million — or 30% — of the company’s previously announced plans for cash reductions of more than $500 million in operating expenses, capital projects and working capital.
In addition, Nordstrom said it would move its anniversary sale to August from July as it implements a store reopening plan.
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Throughout the crisis, Nordstrom has been focusing on e-commerce, which represented a third of 2019 sales. The company said its off-price online business exceeded $1 billion last year.
Now the retailer is bridging brick-and-mortar and digital operations like never before. It said more than half of Nordstrom.com orders are now being fulfilled from full-line stores, and 25 percent of Nordstromrack.com and HauteLook.com orders are being fulfilled by Nordstrom Rack stores.
“We’ve been investing in our digital and physical capabilities to keep pace with rapidly changing customer expectations. The impact of COVID-19 is only accelerating the importance of these capabilities in serving customers,” said Erik Nordstrom, CEO of Nordstrom. “More than ever, we need to work with flexibility and speed. Our market strategy helps with both, bringing inventory closer to where customers live and work … and connecting digital and physical experiences with services like curbside pickup and returns.”
Nordstrom has been moving quickly to bolster its financial position. It announced on March 23 that it would draw down $800 million on its revolving credit facility, as well as suspend its cash dividend and share repurchases. The 119-year-old department store has also implemented furloughs during store closures.