Nordstrom will cut a further half billion dollars from its spending plans, suspend its cash dividend and share repurchases, and look for ways to raise additional capital, the Seattle-based retailer said Monday.
CEO Erik Nordstrom said in a news release that “we are proactively taking steps to strengthen our financial flexibility to help us navigate through this unprecedented situation.”
The company on March 16 announced the temporary closure of its full-line and Nordstrom Rack stores to help prevent the spread of COVID-19, the disease caused by the novel coronavirus. It had previously disclosed plans to cut $200 million to $250 million in costs. The additional effort to pare an additional $500 million in costs will involve cuts in “operating expenses, capital expenditures and working capital,” as well as “ongoing efforts to realign inventory to sales trends,” the company said in the news release.
Nordstrom said Monday it had finished its fiscal 2019 “with a healthy balance sheet, including $853 million of cash,” and is now drawing down $800 million on its revolving line of credit. In addition, it will explore raising additional funds “when and if the company deems it prudent.”
• suspending share repurchases
In addition to these actions, the Company continues to actively pursue further options to increase financial flexibility. While there is no immediate need to raise capital at the present time, the Company intends to evaluate accessing the financing markets and will look to raise capital, when and if the Company deems it prudent, to further strengthen its balance sheet.
On March 16, the Company announced the temporary closures of its stores, including Nordstrom full-line and Nordstrom Rack, to do its part in slowing down the spread of COVID-19. Nordstrom continues to serve customers through its online business, which represented one-third of fiscal 2019 sales. Through ongoing actions to stimulate customer demand and clear excess inventory, sales from its online business are helping to partially mitigate the impact from store closures.