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Is Nordstrom Going Out of Business?

Photo Courtesy: @Nordstrom/Twitter

Unlike major retailers such as JCPenney and Neiman Marcus, which filed for bankruptcy protection in May 2020, Nordstrom is still in business. However, the premium department store retailer has permanently closed several stores and restructured its business plan to regain some of what it lost in the first quarter of the year. 2020 has been a challenging year for many businesses, including major retailers like Nordstrom, Macy's, JCPenney, Neiman Marcus and others. When the threat of COVID-19 forced people to social distance, many shopping malls and businesses also temporarily closed their doors and relied exclusively on online shopping to stay afloat.

Is Nordstrom Still in Business?

As of June 2020, Nordstrom is still in business. However, the premium department store announced a decrease of 40 percent net sales compared with last year. Erik Nordstrom, CEO of Nordstrom, Inc., explained, "We successfully strengthened our financial flexibility by increasing liquidity, lowering inventory by more than 25 percent from last year and significantly reducing our cash burn by more than 40 percent from March into April." He continued, "We're entering the second quarter in a position of strength, adding to our confidence that we have sufficient liquidity to successfully execute our strategy in 2020 and over the longer term."

Photo Courtesy: @Nordstrom/Twitter

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 COVID-19 virus, the company announced it would be permanently closing 16 of its department stores on May 8, 2020. These permanent store closures impact states around the country, including California, New Jersey, Florida, Texas and others.

Nordstrom isn't the only department store that's struggling financially. JCPenney filed for bankruptcy on May 15. Although it has reached an agreement with lenders to restructure its plan to stay in business, the department store giant will close 30 percent of all its stores. J.Crew is another struggling retailer. The company was the first national U.S. retailer to file for bankruptcy protection on May 4. J.Crew expects to stay in business and emerge as a profitable company. On May 7, luxury retailer Neiman Marcus also filed for bankruptcy and devised a restructuring agreement with credits to reposition the brand for long-term growth.

One of Nordstrom's biggest sales events of the year is its Anniversary Sale, which will be held on August 19, 2020. As usual, Nordstrom cardmembers will have early access to the sale's inventory starting a few days ahead. An increasing number of shoppers are opting for the retailer's sales and reduced clothing prices, which is evident in its sales report from previous years. In 2019, Nordstrom said that its Off-Price and e-commerce business made up nearly 60 percent of its sales.

Nordstrom Local

Nordstrom Local gives you 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.

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Nordstrom Local 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 offers donation drop-offs for your gently used fashion.

Nordstrom Rack

Nordstrom Rack, the company's off-price retail division, was founded in 1973. If you're looking for a great deal, Nordstrom advertises between 30 and 70 percent off the original price for most of its items.

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In addition to its discounts, Nordstrom Rack operates alongside HauteLook, its private sale site, to provide customers with the latest fashion at lower prices. As of June 2020, there are 250 Nordstrom Rack locations. However, many customers also shop online.