Is Nordstrom Going Out of Business?
Many clothing retailers have experienced financial hardship in the past few years, such as JCPenney and Neiman Marcus, which both filed for bankruptcy protection in May 2020. Nordstrom, however, is still in business and has not declared bankruptcy, although it has permanently closed several stores and restructured its business plan to regain some of what it lost in the first quarter of 2020.
As with many businesses, how the company will fare going forward remains unclear. The pandemic continues to make gathering in indoor spaces, especially poorly ventilated ones, a risky choice.
Is Nordstrom Still in Business?
Over 100 Nordstrom stores are still in business, although Nordstrom Inc. also announced a 40 percent net decrease in sales in 2020 compared to the previous year. Some Nordstrom stores have permanently closed. Nordstrom has 116 full-line clothing stores, not counting its Nordstrom Rack or Trunk Club locations.
While all of its stores were temporarily shut in mid-March due to the pandemic, the company announced it would be permanently closing 16 of its department stores on May 8, 2020. These permanent store closures impacted states around the country, including California, New Jersey, Florida, Texas and more. 6,000 jobs were also cut in June even as stores reopened, and Nordstrom executives took reduced salaries.
Nordstrom isn't the only department store that's struggling financially. As mentioned previously, JCPenney filed for bankruptcy on May 15, 20, although it later reached an agreement with lenders to restructure its business model to avoid fully closing. Even so, the department store giant has closed 30 percent of its stores. Similarly, J.Crew and Neiman Marcus also filed for bankruptcy while still planning to stay in business overall.
Nordstrom Local provides the same Nordstrom experience, just a little closer to home. These service hubs are currently available in New York City and Los Angeles, with multiple stores available throughout each city. The chain provides express services, such as alterations, as well as pickups and returns for online orders. You can also get free styling help along with a gift-wrapping service for those last-minute gifts. Need to get rid of some clothing? Nordstrom Local also accepts donation drop-offs for your gently used fashion.
Before the pandemic, order pickup sales had grown by 160 percent in markets where Nordstrom Local stores were in operation. While social distancing has complicated Nordstrom’s plans, the company still hopes to significantly expand the chain’s presence due to the profits it continues to generate.
Other Nordstrom Subsidiaries
Nordstrom Rack, the company's off-price retail division, was founded in 1973 and continues to offer cheaper rates than its sister stores. It advertises between 30 and 70 percent off the original price for most of its items and has around 250 locations scattered around the country. Nordstrom Rack is also unusual in that it’s one of the only off-price brick-and-mortar clothing stores to also partake in a significant amount of e-commerce. Going forward, the company plans to further link the assets of Nordstrom Rack, Nordstrom Local and full-line Nordstrom stores.
Speaking of finding discounts online rather than in person, Nordstrom also owns HauteLook, an online clothing retailer that provides customers with the latest fashion at lower prices. Meanwhile, Trunk Club, another subsidiary of Nordstrom, offers a service similar to Stitch Fix where shoppers can have clothing delivered directly to their door.
An increasing number of shoppers are opting to buy discount clothing from Nordstrom and its subsidiaries, which has become evident in the company’s sales reports over the past few years. In 2019, Nordstrom Inc. reported that its discount and e-commerce business made up nearly 60 percent of sales that year.