Nordstrom (JWN) - Get Report said late Tuesday it will permanently close 16 full-line stores, restructure regions and adjust its supply chain capabilities in a bid to cut costs and keep its operations afloat amid the coronavirus pandemic that has cost it and other retailers millions.
In an update, the Seattle-based chain said the store closures as well as changes in how it brings its inventory closer to areas where customers live and work will result in savings of $150 million in addition to $500 million in cash reductions it already has outlined.
It also plans to continue focusing on its online presence and clearing excess inventory through increased marketing and promotional efforts.
“We’ve been investing in our digital and physical capabilities to keep pace with rapidly changing customer expectations. The impact of Covid-19 is only accelerating the importance of these capabilities in serving customers,” CEO Erik Nordstrom said in a statement.
The moves suggest a different and less-dire tact for Nordstrom vs. other retailers like J.Crew and J.C. Penney (JCP) - Get Report that are exploring bankruptcy protection as the only option amid the coronavirus pandemic and dramatic drop-off in retail sales.
Combined, the initiatives should result in a 20% reduction in non-occupancy related overhead expenses, Nordstrom said, adding that stores that have been temporarily shuttered since mid-March will be reopened in a phased, market-by-market approach.
The company also plans to shift its anniversary sale event shifted into August from July.
Nordstrom in early April furloughed the majority of its 68,000-strong workforce, though it has continued to provide benefits for workers affected by its store closures.
Shares of Nordstrom were up 0.61% at $17.44 in Wednesday trading.