Nordstrom Has Suspended its Dividend and Halted Buybacks

As the coronavirus pandemic roars on, retailer Nordstrom has decided to suspend its dividend, halt buybacks and has tapped its credit. The company has drawn down $800 million on its revolving credit facility.

“We are proactively taking steps to strengthen our financial flexibility to help us navigate through this unprecedented situation,” CEO Erik Nordstrom stated.

It was on March 17th that the Seattle-based company said it would temporarily shut its more than 360 stores throughout the U.S., Canada and Puerto Rico for two weeks.

The company said it “remains committed” to paying a dividend over the long term, and will figure out when it can resume payments “when appropriate.”

Nordstrom has said that it is 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.

The company wrote in a 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.”

Retailer Macy’s also said last week that it has fully drawn its $1.5 billion revolving credit facility as part of a “proactive measure.” Kohl’s has recently fully drawn its $1 billion unsecured credit facility to increase its cash position and “preserve its financial flexibility,” as well.

Shares of Nordstrom dopped over 12% on Monday.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.