American department store chain Nordstrom suffered a 40 % turnover decrease in the quarter ending 2 May, but the company says it believes in a bright future after Covid-19. After all, many competitors fare even worse.
Net loss through the roof
Nordstrom struggles with the current Covid pandemic, as only 40 % of its stores is currently allowed to open. It may take another month to have all stores open again. In that light it is unsurprising that the wounds from the pandemic are significant for Nordstrom: in the quarter up to 2 May its turnover almost halved from 3.35 billion dollars to just 2.03 billion dollars (1.8 billion euros). On the bright side, online sales went up 5 % to 1.1 billion dollars (just shy of a billion euros), meaning more than half of the chain's sales now come from online.
Even more worrisome is the evolution of profit, which has completely disappeared: the net profit of 37 million dollars of last year has made way for a huge net loss of 521 million dollars (460 million euros), Reuters reports. 173 million dollars (150 million euros) come from closing stores as part of measures that were already decided on before the covid-outbreak.
Last one standing
Earlier this month, the chain announced that another 16 of its 116 stores in the United States will have to close. Still, CEO Erik Nordstrom thinks his chain has a strong position to enter its second quarter: the premium chain has improved its financial flexibility by raising liquidity, lowering stocks by a quarter and spending 40 % less in March and April.
More cost-cutting measures will be put into place shortly, while a stronger marketing strategy will be adopted. The chain hopes it can profit from the bankruptcy of competitors like JCPenney, J.Crew and Neiman Marcus. Will the last man standing be the ultimate winner?