Nordstrom sales plunge nearly 40per cent on pandemic-led store closures

Upscale department store chain Nordstrom Inc on Thursday reported a nearly 40per cent slump in quarterly sales, as lockdowns to contain the COVID-19 pandemic forced it to shut stores.

REUTERS: Upscale department store chain Nordstrom Inc on Thursday reported a nearly 40per cent slump in quarterly sales, as lockdowns to contain the COVID-19 pandemic shut stores.

Measures to contain the coronavirus outbreak have weighed heavily on retailers, with J.C. Penney , J.Crew, Neiman Marcus and Stage Stores all having recently filed for bankruptcy.

Seattle-based Nordstrom said online sales rose 5per cent to US$1.1 billion in its first quarter ended May 2. The retailer has strived to reduce inventory, cut costs and sharpen its marketing strategy.

"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," Chief Executive Erik Nordstrom said in a statement. "We're entering the second quarter in a position of strength."

Nordstrom said roughly 40per cent of its stores have reopened, though they are in smaller markets. It plans to reopen its entire fleet of shops by the end of June, including in major markets California and New York.

Total net sales in the first quarter dropped to US$2.03 billion from US$3.35 billion a year earlier.

It reported a net loss of US$521 million, or US$3.33 per share, compared with a profit of US$37 million, or 23 cents per share, a year earlier.

The company said store closures and restructuring led to a US$173 million charge. Earlier this month, Nordstrom announced it would close 16 of its 116 full-line U.S. stores.

Earlier on Thursday, America's top dollar store chains, Dollar General Corp and Dollar Tree Inc , beat profit estimates and said they would benefit from demand for affordable groceries and household essentials in coming months as rising unemployment threatens to spur a deep recession.

(Reporting by Nivedita Balu in Bengaluru and Melissa Fares in New York; Editing by Lisa Shumaker and Leslie Adler)