Nordstrom plans to permanently close 16 of its 116 full-line stores while moving toward a phased reopening of others, as it tailors its immediate future to the realities of retail in the coronavirus pandemic.

The Seattle-based company also said it will make changes to how its stores function in a “market-by-market” approach, and will move its big Anniversary Sale from July to August.

Shuttering one out of seven stores is not simply a response to the pandemic, said Neil Saunders, managing director of GlobalData Retail.

“This coronavirus crisis is the catalyst rather than the cause,” he said. “Not all of its full-line stores pull their weight. … Some have profitability that is dwindling. They’re saying, ‘Look, we don’t see a future in these stores, let’s cut our losses.’”

That kind of triage frees the company to invest where it makes most sense, he added.

Nordstrom did not say which stores would be closed. A spokeswoman said Wednesday morning it’s in the process of notifying employees at the affected locations.


The company has selectively closed some full-line stores in recent years. In January 2019, it had 121, according to a regulatory filing.

In a statement, Nordstrom CEO Erik Nordstrom said the company has been spending in recent years “to keep pace with rapidly changing customer expectations. The impact of COVID-19 is only accelerating the importance of these capabilities in serving customers.”

He said the company will press ahead with its dual digital and physical strategies, “bringing inventory closer to where customers live and work, allowing us to use our stores as fulfillment centers to get products to customers faster, and connecting digital and physical experiences with services like curbside pickup and returns.”

The company gave no specific timetable for the reopening of its other stores, which closed temporarily in mid-March. At that time Nordstrom also withdrew its financial guidance for the year, saying coronavirus outbreaks had made forecasts difficult.

The retail sector has been reeling from the pandemic’s shutdown of shopping. On Monday, J. Crew’s parent company filed for Chapter 11 bankruptcy, and observers predict other retailers may follow.

Saunders said Nordstrom is in better financial shape than J. Crew or Neiman Marcus, and in better shape as a retail concept than many of its peers. “Nordstrom has a very good balance sheet and a proposition that generally works very well,” he said.


Its full-line stores have been kept up to date, and it has also developed a solid parallel business with its 247 Rack stores, which may prove crucial in the months ahead.

“We’ve seen in many of the previous recessions that the discount business does well because consumers trade down,” said Saunders.

Nordstrom said Wednesday that at both the full-line and discount stores, its online and in-store sides are closely integrated: “More than half of Nordstrom’s store sales involve an online journey and a third of online sales involve a store experience.” According to the company, more than half of orders are fulfilled from full-line stores, and 25% of and orders are fulfilled by Nordstrom Rack stores.

The company also said it will restructure its regional and corporate organization “for greater speed and flexibility” in moves that will save about $150 million a year. Details were not provided.

The company had previously said it aims to cut more than $500 million in cash outlays for operating expenses, capital expenditures and working capital. Earlier cost-cutting has already yielded expected savings of more than $200 million, it said.

When its stores do reopen, Nordstrom said, changes will include conducting health screenings for employees; providing face coverings for employees and customers; taking steps to allow for social distancing of 6 feet or more, including limiting the number of customers and employees in the store; increasing cleaning and sanitizing; modifying the fitting room experience; and continuing to offer curbside services at full-line stores.

Saunders said that when Nordstrom and other major retailers reopen, “It won’t be a quick bounce-back” because many consumers will be afraid and others simply won’t have the money after being financially battered by layoffs and furloughs.

“It won’t be a normal retail environment,” he said. “It’s certainly not going to be like this time last year.”

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