Pedestrians pass in front of a Nordstrom Inc. store in the Midtown neighborhood of New York, on Friday, March 20, 2020.
Gabby Jones | Bloomberg via Getty Images
Nordstrom said Monday that it is suspending its dividend, halting share buybacks and has drawn down $800 million on its revolving credit facility, in the midst of the coronavirus pandemic.
“We are proactively taking steps to strengthen our financial flexibility to help us navigate through this unprecedented situation,” CEO Erik Nordstrom said in a statement.
Nordstrom said it “remains committed” to paying a dividend over the long term, and will figure out when it can resume payments “when appropriate.”
The Seattle-based department store chain said it ended 2019 with $853 million of cash on hand.
The company is now targeting cutting expenses by more than $500 million this year, up from an initial savings target of $200 million to $250 million in fiscal 2020. “This includes ongoing efforts to realign inventory to sales trends,” it said.
Nordstrom added in its press release that, “while there is no immediate need to raise capital at the present time, [it] 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 had previously announced on March 17 that it would temporarily shut its more than 360 stores throughout the U.S., Canada and Puerto Rico for two weeks. When it made the announcement, Nordstrom also withdrew its 2020 earnings outlook.
The news from Nordstrom comes after Macy’s said Friday that it has fully drawn its $1.5 billion revolving credit facility. The department store chain said it did so as a “proactive measure.”
Macy’s has also withdrawn its 2020 sales and earnings outlook, and is suspending its quarterly cash dividend.
Kohl’s said last week that it has fully drawn its $1 billion unsecured credit facility to increase its cash position and “preserve its financial flexibility,” in the midst of so much uncertainty.
Kohl’s has also temporarily suspended share buybacks and has withdrawn its earnings outlook for the current quarter and fiscal year. Further, Kohl’s said it is evaluating its dividend model.
Nordstrom, Macy’s and Kohl’s join a growing list of retailers taking similar measures to try to preserve their businesses, as thousands of stores across the U.S., including entire malls, have temporarily gone dark.
J.C. Penney, Abercrombie & Fitch and L Brands are among the names that have withdrawn their outlooks, unclear what the future will hold. Many are also tapping credit lines for help.
Nordstrom shares closed Monday down more than 12.5%, amid a broader market sell-off. Its stock is down more than 61% this year.