Nordstrom extends store closures into April, reveals staff exits
Nordstrom is extending its temporary store closure and saying goodbye to employees, as a future with Covid-19 remains uncertain.
Since March 17, the Seattle-based department store has temporarily closed all of its Nordstrom full-line, Nordstrom Rack, Trunk Club and Jeffrey locations in the U.S. and Canada. Nordstrom initially said it would close for two weeks, however, stores will now remain closed, through April 5.
“We are taking action across our business to respond to the challenges we are facing today and to best position Nordstrom for our employees, customers and shareholders. We have a responsibility to protect the health of our people, while also preserving our long-term ability to offer jobs and benefits to our employees. The decisions we make are with that in mind,” said Erik Nordstrom, chief executive officer, in a news statement.
While Nordstrom is providing ongoing pay and benefits to all store employees impacted by the temporary closures, through April 5, it has temporarily cut a portion of corporate employees. As of April 5, employees will leave their positions for six weeks.
The giant retailer said it had made the decision as it predicts it will require a smaller workforce during this time.
“This is the most difficult decision we have made in our company’s long history. Through our 119 years, our company has faced many challenges, but these are unprecedented times,” said Nordstrom.
“We take very seriously the responsibilities we have with our people, customers and all stakeholders. We are confident these steps will help ensure the health of our company as we continue to navigate the unknown and changing environment we are facing.”
The Nordstrom Executive Leadership Group said that it will forgo a part of their salary, and both Pete and Erik Nordstrom will decline their salary from April through September. Similarly, all members of the company’s board of directors will forgo cash compensation for a six-month period.
The announcement follows additional measures launched on Monday to protect its financial position amid the Covid-19 crisis, which included suspending its quarterly cash dividend beginning in the second quarter of fiscal 2020, as well as halting its share buyback program.
Nordstrom exited fiscal 2019 with a healthy balance sheet, including $853 million of cash. Still, there’s no doubt it will take a hit, as its 380 stores in 40 states temporarily close.
While store ares closed, Nordstrom continues to serve customers through its online business, which represented one-third of fiscal 2019 sales.
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