Nordstrom Inc. in a regulatory filing said the spread of COVID-19 has had a “substantial impact” on its business and results for the first quarter “and beyond will be adversely impacted in a significant manner.”
The department store operator said it is unable to accurately predict the impact that COVID-19 will have on its operations going forward due to:
- uncertainties which will be dictated by the length of time that such disruptions continue;
- the currently unknowable duration of the COVID-19 pandemic;
- the impact of governmental regulations that might be imposed in response to the pandemic;
- potential changes in consumer behavior, including traffic through stores once they reopen; and
- the deterioration in the economic conditions in North America, which potentially could have an impact on discretionary consumer spending.
Ann Munson Steines, EVP, general counsel and corporate secretary, wrote in the filing, “While the company continues to generate sales and clear excess inventory by fulfilling customer online orders from both its physical stores and its fulfillment centers, we are uncertain when we will be able to reopen our physical stores to customers. The longer our stores remain closed to the public, the greater impact it will have on our results of operations and financial condition, and if our physical locations remain closed to customers for an extended period of time our financial situation could become distressed.”
Munson Steines further elaborated on many of the new risks Nordstrom is facing in the filing. She also noted the numerous Nordstrom has already taken to strengthen its financial flexibility, including suspending its quarterly dividend, drawing down borrowings from its credit line, conducting furloughs of the majority of its workforce, and reducing the salaries of its leadership team.
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