Is Nordstrom Going Out of Business? Retailer Shares Heavy News With Shoppers

The COVID-19 pandemic took a toll on many businesses, especially brick-and-mortar retailers. Consumers’ shopping habits have and continue to change drastically, leaving many department stores in the dust. Now as the pandemic abates and inflation has stepped in to cause more disaster, customers and investors are questioning if Nordstrom is going out of business.

Nordstrom has been around since the early 1900s, although the brand only sold shoes back then. Later, the company expanded its lineup of products and became a leading American luxury department store chain in the U.S. In May 2023, the retailer announced that it would be closing some stores. Prior to that, it revealed that it would be winding down business in Canada.

So, the question remains: Is Nordstrom going out of business? Here's what we know.

Nordstrom had to close several stores due to the pandemic, but it did so strategically: it closed locations that weren't delivering good returns. A large part of Nordstrom’s underperformance was due to its off-price Rack business, which the company even thought of spinning off at one point. This division had a hard time securing merchandise during the pandemic due to supply chain issues. `

Fast forward to the fourth quarter ended Jan. 28, 2023, and Nordstrom reported a decline in sales. However for the fiscal year ended Jan. 28, 2023, Nordstrom's net earnings were $245 million.

Nordstrom said its net sales had decreased by 2.4 percent for the fourth quarter in 2022 compared to the year prior and dropped 8.1 percent at its Nordstrom Rack banner. The company also disclosed that 2022 fourth-quarter digital sales had decreased by 13.1 percent.

Despite the hurdles Nordstrom has encountered over the years, the company isn't going out of business. Instead, it continues to navigate with "macroeconomic uncertainty" in mind and make moves according to market changes. And if that includes shuttering some Nordstrom stores, so be it.

In addition to the stores it closed as a result of the pandemic, Nordstrom decided to shutter two locations in San Francisco in 2023 — the San Francisco Centre Nordstrom store and the Market Street Rack, Fox Business reported.

According to Fox, a mall spokesperson said, "A growing number of retailers and businesses are leaving the area due to the unsafe conditions for customers, retailers, and employees, coupled with the fact that these significant issues are preventing an economic recovery of the area."

Walmart also closed stores due to the increasing crime levels.

Nordstrom won't renew its lease for its two San Francisco store locations due to a "change in dynamics." The Market Street Rack will remain open until July 1, 2023, and the San Francisco Centre location will shutter at the end of August 2023.

As of January 2023, Nordstrom had 94 stores open and operating in the U.S. as well as 241 Nordstrom Rack locations. The company also had 13 stores in Canada of which seven were Nordstrom Rack stores.

In a 2022 fourth-quarter press release, Nordstrom announced that it would “discontinue support for Nordstrom Canada’s business operations” because it didn't see a “realistic path to profitability.”

Nordstrom said that its will cease operations in Canada with the help of a third-party liquidator. The Canadian e-commerce platform will stop working on March 2, 2023, and Nordstrom store closures in Canada are expected to be completed by late June 2023.

Nordstrom Rack is a division of Nordstrom that provides top designer fashion and accessories at discounted prices. The inventory sold in Nordstrom Rack comes from Nordstrom stores, though it's marked down significantly, sometimes as much as 70 percent off the retail price.

Between December 2022 and April 2023, Nordstrom announced that it would be opening several Nordstrom Rack locations across the nation. Some of the locations include:

• San Antnio, Texas
• Jacksonville Beach, Fla.
• Elk Grove, Calif.
• Wheaton, Ill.
• Snellville, Ga.
• Macedonia, Ohio
• Davis, Calif.
• Natomas, Calif.

If you're an avid Nordstrom Rack shopper, don't worry as the company only seems to expanding on its locations as opposed to closing them.