BREAKING NEWS: NORDSTROM TO WIND-DOWN CANADIAN BUSINESS
Yesterday afternoon Nordstrom, Inc., reported fourth-quarter net earnings of $119 million, entering the fiscal year 2023 with a healthier inventory position, down 15 percent from last year and comparable to 2019.
“We took decisive actions to right-size our inventory as we entered the new year, positioning us for greater agility amidst continuing macroeconomic uncertainty. We also made the difficult decision to wind down operations in our Canadian business. This will enable us to simplify our operations and further increase our focus on driving long-term profitable growth in our core U.S. business,” said Erik Nordstrom, chief executive officer of Nordstrom, Inc.
Nordstrom Canada operates six Nordstrom stores, seven Nordstrom Rack stores, and the Nordstrom.ca website, employing approximately 2,500 people.
Erik Nordstrom went on to say, “We regularly review every aspect of our business to make sure that we are set up for success. We entered Canada in 2014 with a plan to build and sustain a long-term business there. Despite our best efforts, we do not see a realistic path to profitability for the Canadian business. We want to thank our team for their performance and dedication in serving customers in Canada. This decision will simplify our structure, intensify focus on our growth and profitability goals and position us to create greater value for our shareholders.”
Accordingly, Nordstrom Canada has commenced a wind-down of its operations, obtaining an Initial Order from the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act (“CCAA”) earlier today to facilitate the wind-down in an orderly fashion.
Nordstrom Canada intends to wind down its Nordstrom and Nordstrom Rack stores across Canada, with the help of a third-party liquidator, and its Canadian e-commerce platform. The e-commerce platform ceased operations yesterday. The in-store wind-down is anticipated to be completed by late June.
The wind-down is expected to result in an approximately $400 million decline in total Company net sales and a $35 million improvement in total Company EBIT in fiscal 2023, relative to fiscal 2022, excluding charges associated with the wind-down.
The good news? Across the entire company in the fourth quarter of 2022, men’s apparel had the strongest growth versus 2021.
For more in-depth information, review Nordstrom, Inc.’s press release here. A recording of company senior management’s conference call from Thursday afternoon can be accessed at investor.nordstrom.com. An archived webcast with the speakers’ prepared remarks and the conference call slides is available in the Quarterly Results section for one year. A telephone replay is also available until the close of business on March 9, 2023, by dialing 877-660-6853 or 201-612-7415 and entering Conference ID 13735859.
