Nordstrom Inc. will extend its temporary store closures for at least one week through April 5 due to the uncertainty of the coronavirus, though the retailer is just the first of what’s expected to be many prolonged closures.
Macy’s, too, expects to delay the reopening of its stores due to the pandemic.
Since March 17, Nordstrom has provided pay and benefits to all store employees impacted by the temporary closures. The company plans to offer store employees an additional week of pay through April 5, as well as benefits through April.
The Seattle-based company was the first major retailer to decide to close of all its stores on March 16.
Nordstrom also said it will require “a smaller workforce to execute on the critical activities of the business during this time. As a result, it will be furloughing a portion of corporate employees starting April 5 for six weeks. Impacted corporate employees will continue to receive enrolled benefits.”
The retailer’s chief executive officer, Erik Nordstrom, and Pete Nordstrom, president and chief brand officer, have declined their salary from April through September. The executive leadership group will forgo a part of their salary. Similarly, all members of the board of directors will forgo cash compensation for a six-month period.
“We are taking action across our business to respond to the challenges we are facing today and to best position Nordstrom for our employees, customers and shareholders. We have a responsibility to protect the health of our people, while also preserving our long-term ability to offer jobs and benefits to our employees. The decisions we make are with that in mind,” said Erik Nordstrom.
“This is the most difficult decision we have made in our company’s long history. Through our 119 years, our company has faced many challenges, but these are unprecedented times,” said Nordstrom. “We take very seriously the responsibilities we have with our people, customers and all stakeholders. We are confident these steps will help ensure the health of our company as we continue to navigate the unknown and changing environment we are facing.”
Macy’s chairman and chief executive officer Jeffrey Gennette has also decided to take no compensation for the duration of the pandemic, and in a letter to vendors Wednesday he wrote: “We had initially hoped to reopen April 1, but that is highly unlikely to happen. While our digital business and call centers remain open, we have lost the majority of our sales. Most of our corporate and support teams are under work-from-home or shelter-in-place orders.
“We’ve taken a number of actions to improve our position — suspending the dividend, drawing down our line of credit, freezing both hiring and spending, deferring capital spend, reducing receipts and evaluating all other financing options. We have reduced pay for management at the director level and above. For the duration of the crisis, I will take no compensation. The board of directors will not receive any compensation. And it is possible that we may need to begin furloughs of our colleagues if this crisis continues.
Regarding vendors, Gennette wrote, “Effective immediately, we are extending the terms for payment of all goods and services to 120 days.”
J.C. Penney, which said it would keep its stores closed until April 2, is also expected to extend that date, according to market reports. Penney’s had no comment Wednesday evening. The Plano, Tex.-based company is among the more troubled major retailers in the U.S., and its difficulties are compounded by having a $105 million bond maturity due next June. Lenders could decide to give Penney’s more time to pay that.
All Nordstrom stores, Penney’s stores and Macy’s Inc. stores in North America have been temporarily closed.
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