Nordstrom is temporarily shutting its stores in the U.S. and Canada to prevent the spread of the coronavirus and pulled back its 2020 guidance.
The department store said the closures will last for two weeks. Nordstrom’s websites and, where possible, its curbside order pickup services will remain open. Nordstrom operates 380 stores across 40 states. It has 116 full-stores in the U.S., Canada and Puerto Rico.
“On behalf of everyone at Nordstrom, our hearts go out to all those impacted by COVID-19 — this includes not only those diagnosed with the virus, but also their friends and family, those whose jobs and schools have been impacted and so many more,” the retailer said in a statement Monday. “Our focus is, as always, on the health and safety of our employees, customers and communities.”
Nordstrom noted that it will continue to provide its employees with pay and benefits while the stores are closed.
Nordstrom also said it is withdrawing its full-year 2020 financial outlook because of the uncertainties about the virus’ impact. It also said it was “making further reductions to its expense and capital expenditure plans,” and is suspending share repurchases.
“During this unprecedented period of uncertainty, we have in place the appropriate business continuity plans, operational framework and team,” said CEO Erik Nordstrom.
Around 9:45 a.m. Tuesday, Nordstrom’s stock was already down over 11 percent, trading at $15.24.
In its fourth-quarter earnings call, Erik Nordstrom said the company was watching the impact of the coronavirus on the store’s traffic and supply chain.
“Our private label business makes up around 10 percent of sales, with less than 30 percent sourced from China,” he said. “We are communicating with our vendors and brand partners as it relates to merchandise deliveries. We’re looking at this on a case-by-case basis and planning accordingly.”
Cities and states around the country have instituted curfews and restrictions on public gatherings, a move that has led some malls, like the massive American Dream in New Jersey, to shutter to help prevent the spread of the respiratory disease. Other mall owners have said they are upping their disinfecting measures and canceling events held at their locations.
Other major retailers, like Nike and Sephora also have said they were closing their stores amid the pandemic.
The coronavirus, which leads to COVID-19 disease. So far, it has killed over 6,500 people globally across dozens of countries.
Nordstrom also has been struggling to offset lagging sales. The department store recently announced it was closing all of its six Trunk Club stores and will integrate them within regular Nordstrom locations, a move that the store said would help it “gain efficiencies.”
In the fourth quarter of 2019, Nordstrom reported earnings before interest and taxes of $299 million, a drop from $333 million the year before. Nordstrom reported greater growth in its discount and digital order sales divisions, compared to full-price merchandise.
Nordstrom also recently opened a new flagship location in Manhattan’s Columbus Circle. The seven-story store offers a range of experiential services to customers, including a dry bar for hair styling and 24/7 online order pickup.
The decision to close its stores comes as department stores around the country have struggled to adapt to changing consumer behaviors and the rise of e-commerce. Sears, the Bon-TonStores and Barneys New York are among the department store chains that have filed for bankruptcy in recent years.
Last year, U.S. retailers announced over 9,500 store closures — the highest amount tracked by Coresight Research. That compares to about 4,600 openings.
But so far in 2020, retailers in the U.S. have announced over 1,600 store closures and nearly 2,700 openings.
Write to Mary Diduch at md@therealdeal.com