Nordstrom suspends quarterly cash dividend and share repurchases
Nordstrom announced on Monday additional measures to protect its financial position amid the Covid-19 crisis.
The Seattle-based department store said it will suspend its quarterly cash dividend beginning in the second quarter of fiscal 2020, as well as halt its share buyback program.
Furthermore, it is drawing down $800 million from a loan facility and targeting reductions of more than $500 million in operating expenses, capital expenditures and working capital. This includes ongoing efforts to realign inventory to sales trends.
“During this time of great uncertainty, we’re making decisions to best position Nordstrom for our employees, customers and shareholders,” said Erik Nordstrom, chief executive officer of Nordstrom Inc., in a news statement.
“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, but is still actively pursuing options to increase financial flexibility. It also had initial savings plan of $200 to $250 million in fiscal 2020.
As of March 17, Nordstrom has temporarily closed all of its Nordstrom full-line, Nordstrom Rack, Trunk Club and Jeffrey locations in the U.S. and Canada for two weeks.
It operates 380 stores in 40 states, including 116 full-line stores in the United States, Canada and Puerto Rico; 248 Nordstrom Rack stores; three Jeffrey boutiques; two clearance stores; six Trunk Club clubhouses; and five Nordstrom Local service hubs.
Nordstrom is a part of a flurry of North American retailers who have been forced to close retail locations to protect consumers and employees, as the Covid-19 pandemic progresses.
Nordstrom continues to serve customers through its online business, which represented one-third of fiscal 2019 sales.
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