10 May 2020
The Weekly
United States

Nordstrom is planning to permanently close 16 of its full-line department stores this year. It operates 116 full-line stores in the U.S., Canada and Puerto Rico. Nordstrom is also restructuring its regions, support roles and corporate organization for “greater speed and flexibility. The restructuring is expected to result in expense savings of approximately $150mn, or 30% of the company’s previously announced plans for net cash reductions of more than $500mn in operating expenses, capital expenditures and working capital. These actions, combined with its initial savings plan of $200mn to $250mn, represent a reduction in non-occupancy-related overhead expenses of approximately 20%. Nordstrom temporarily closed all of its stores, including Nordstrom full-line department stores, Nordstrom Rack, Trunk Club clubhouses and Jeffrey in the U.S. and Canada on March. Nordstrom plans to reopen stores in a phased, market-by-market approach where allowed by local authorities and with the health and safety of employees, customers and communities as a priority.

The company has been investing in its digital and physical capabilities to keep pace with rapidly changing customer expectations. Online business will grow as a percentage of total revenues. In 2019, e-commerce represented one-third of 2019 sales, including off-price sales online business that exceeded $1bn. Nordstrom recently advanced store fulfilment capabilities last month, enabling Nordstrom Rack to fulfil online orders, in addition to already having that capability at Nordstrom department stores. More than half of Nordstrom.com orders are currently fulfilled from full-line stores, and 25% of Nordstromrack.com and HauteLook.com orders are now fulfilled by Nordstrom Rack stores. In addition, Nordstrom recently launched its e-commerce in Canada, with all online sales fulfilled from the six full-line stores there.

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