Retail

Nordstrom is closing all US stores because of coronavirus, withdraws 2020 outlook

Key Points
  • Nordstrom's more than 360 stores in the U.S., Canada and Puerto Rico will be closed for two weeks.
  • "This, in concert with ending 2019 with a solid financial position and healthy balance sheet, gives us the ability to weather this challenging moment in time," CEO Erik Nordstorm said. 
  • Nordstrom said its e-commerce operations, which made up about a third of its 2019 sales, will remain open.
The outside of Nordstrom's men's store in New York, which opened in April 2018.
Source: Nordstrom

Nordstrom is closing its more than 360 stores temporarily to try to curb the spread of COVID-19. 

The department store retailer has also withdrawn its 2020 earnings outlook, due to the uncertainty of the situation. Nordstrom said it has experienced "a broad-based deceleration in customer demand over the past couple of weeks, particularly in markets most affected by the virus." 

Nordstrom said its e-commerce operations, which made up about a third of its 2019 sales, will remain open.

The Seattle-based chain will close all of its locations, including its off-price division Nordstrom Rack, in the U.S. and Canada beginning Tuesday, for two weeks. Its Trunk Club locations and a handful of Nordstrom Local shops that handle returns will also go dark. Nordstrom said it will continue to offer pay and benefits to store workers at this time. 

Nordstrom has 116 full-line department stores in the U.S., Canada, and Puerto Rico, and 248 Rack shops. 

"During this unprecedented period of uncertainty, we have in place the appropriate business continuity plans, operational framework and team," CEO Erik Nordstrom said in a statement. "This, in concert with ending 2019 with a solid financial position and healthy balance sheet, gives us the ability to weather this challenging moment in time." 

With so much economic uncertainty, Nordstrom said it will also be working toward making "further reductions to its expense and capital expenditure plans." The retailer is also suspending share repurchases. 

Amid a broader market sell-off, Nordstrom shares closed Monday down more than 20% and has has tumbled more than 60% in the past 12 months. 

Nordstrom's rivals are still operating some locations, just on reduced hours. Kohl's and J.C. Penney have cut their store hours. Macy's has not yet offered an update on its plans. 

Many retailers, including NikeApple, Glossier and Allbirds, have closed their stores temporarily to allow employees to be safe at home, and have encouraged consumers to do the same. In some states, however, all nonessential retail is being forced closed, according to local mandates. In that case, a retailer has no decision to make but to go dark. 

Gordon Haskett analyst Chuck Grom said he expects same-store sales declines for mall-based retailers, including department stores, to be "far worse than what we saw during the post 9-11 period and 2008 Great Recession." 

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