Nordstrom cuts inventory 26% in Q1 by cancelling orders, shipping from stores

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Nordstrom cuts inventory 26% in Q1 by cancelling orders, shipping from stores

June 1, 2020 · Emma Cosgrove, @emmacos  · Supplychaindive.com

Dive Brief:

  • Nordstrom decreased its inventory 26% in the first quarter of 2020 compared to the same period last year, according earnings results released Thursday. Sales decreased 40% in the quarter year over year, and the company posted a $521 million net loss.
  • “With inventory as our biggest lever of flexibility, we reduced receipts by 30% during the first quarter, generated customer demand through increased marketing and promotions, and utilized our fulfillment capabilities to clear inventory held in our stores,” CEO Erik Nordstrom said on a conference call with analysts Thursday.
  • The retailer will reduce capital expenditures for the year by 30%, but supply chain investments remain a top priority, CFO Anne Bramman said. “This includes scaling our end-to-end platforms to support a single view of customers, inventory and product, and integrating physical and digital capabilities in off-price,” said Nordstrom on the call. The company is in the process of merging its full-price and off-price teams in the name of labor efficiency — reducing corporate staff.

Dive Insight:

The significant inventory reduction will give the retailer room to bring in new product as early as June while boosting liquidity, Nordstrom said…

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