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Nordstrom to Lay Off Hundreds of Warehouse Workers

Nordstrom has confirmed plans to lay off 222 workers at its Cedar Rapids, Iowa distribution center.

“We have made the difficult decision to reduce our workforce at our Midwest fulfillment center in order to better align with the current needs of our business,” a spokesperson for the retailer told Sourcing Journal after it filed a WARN notice with Iowa on Tuesday.

“We recognize the impact these changes have on our team members and are committed to taking care of our people as we work through this transition,” they added. Layoffs among the facility’s roughly 1,100 workers will begin by Oct. 18.

The changes come as Nordstrom evolve its supply chain network toward a regional fulfillment model that brings product closer to end consumers. The retailer is “focusing on having the best brands at the best prices at each of our locations,” CEO Erik Nordstrom said on an earnings call last month. Some inventory from the Cedar Rapids warehouse will be shifted to other locations.

Nordstrom is working to improve distribution and fulfillment center productivity, making product more readily available to in-store shoppers for same-day or next-day pickup and speeding up delivery times for online orders.

The retailer downgraded its annual forecast following the second quarter ended in August as it said clearance sales and private-label items at its Nordstrom and Nordstrom Rack banners haven’t resonated with customers.

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“We are prioritizing actions in the short term to position our business for success in a rapidly evolving environment,” Nordstrom said. “It means adjusting our plans for the second half, aligning expenses to those plans, reducing inventory levels and exiting the year in a clean and current inventory position.”

The retailer last week adopted a shareholder rights plan, or a “poison pill,” after a Mexican retail group acquired a 9.9 percent stake in the business. The move allows current shareholders to increase their holdings at a discounted rate and keep hostile investors at bay.

El Puerto de Liverpool, S.A.B. de C.V., the parent company of Mexican retail chain Liverpool, is now the second-largest shareholder after the Seattle retailer’s former chairman Bruce Nordstrom. El Puerto said it purchased 15.755 million shares for $293.8 million as “passive investor” looking to diversify its portfolio.