“During this time of great uncertainty, we’re making decisions to best position Nordstrom for our employees, customers and shareholders,” said Erik Nordstrom, CEO, Nordstrom Inc. “We are proactively taking steps to strengthen our financial flexibility to help us navigate through this unprecedented situation.”
Nordstrom exited fiscal 2019 with a healthy balance sheet, including $853 million of cash. Nordstrom is taking the following actions to increase its cash position and preserve financial flexibility:
- Suspending its quarterly cash dividend beginning in the second quarter of fiscal 2020. The Ccompany will seek to resume payment when appropriate.
- Drawing down $800 million on its revolving line of credit.
- Targeting further reductions of more than $500 million in operating expenses, capital expenditures and working capital. This includes ongoing efforts to realign inventory to sales trends.
- Suspending share repurchases.
In addition to these actions, the company continues to actively pursue further options to increase financial flexibility. The company intends to evaluate accessing the financing markets and will look to raise capital, when and if the company deems it prudent, to further strengthen its balance sheet.
Nordstrom continues to serve customers through its online business, which represented one-third of fiscal 2019 sales. Through ongoing actions to stimulate customer demand and clear excess inventory, Nordstrom says sales from its online business are helping to partially mitigate the impact from store closures.