Nordstrom is closing full-line 16 stores and restructuring its business as the coronavirus pandemic buffets brick and mortar businesses.
The department story company, which currently operates 378 locations across 40 states, said closures will be made “based on the needs of each market.” Nordstrom will absorb non-cash impairment charges tied to the closures, it added.
Restructuring regions, support roles and corporate organization will reduce expenses by $150 million, Nordstrom said, or 30 percent of its previously announced $500 million plan to slash operating expenses, capital expenditures and working capital. Combined with its initial savings plan of $200 million to $250 million, the reduction in non-occupancy related overhead expenses is about 20 percent.
Nordstrom previously outlined plans to reopen temporarily closed stores in phases depending on state and local government guidelines. The retailer’s annual anniversary sale, typically held in July, will be shifted to August this year.
Even though stores are temporarily closed, Nordstrom said it is “generating solid online traffic and conversion and clearing excess inventory through increased marketing and promotional efforts.” Starting in mid-April, the company began fulfilling Nordstrom Rack online orders from its entire store base. Nordstrom has previously detailed the many planned adjustments to store operations to meet new customer needs, including distributing personal protective gear for shoppers and staff, modifying fitting rooms to reduce density, installing social distancing signage and expanding curbside pickup.
The company is known for making bold moves, including its relatively new Local Market strategy in Los Angeles and New York, which it will analyze to determine future services.
“The company is on track to deliver on its savings plans and continues to pursue further efficiencies across the organization while investing in technology and supply chain capabilities,” Nordstrom said.