What's happening

Shares of upscale retailer Nordstrom (NYSE:JWN) were down again on Wednesday as investors continued to grapple with the implications of the COVID-19 pandemic.

As of 1 p.m. EDT, Nordstrom's shares were down about 9.6% from Tuesday's closing price.

So what

Investors are continuing to try to understand how the COVID-19 pandemic could impact scores of industries. For Nordstrom, there are a couple of obvious concerns giving investors pause right now.

A close-up of a Nordstrom sign on the outside of a store.

Image source: Nordstrom.

First, in-store foot traffic in the U.S. seems likely to decline sharply for at least several weeks as the pandemic plays out. Health authorities are advising people to stay away from crowded public spaces as much as possible to limit spread of the virus. It's also possible that Nordstrom will be advised to close some or all of its stores for a period of time. The potential impact on Nordstrom's in-store sales is obvious.

Second, even if the stores are open, they might be struggling to maintain inventories. Virus outbreaks in Asia and Italy are already disrupting fashion's supply lines, a situation that will be exacerbated if the virus spreads throughout Europe.

Finally, investors can't discount the possibility of a U.S. recession, which would depress Nordstrom's sales and margins for several quarters.

Now what

The good news, such as it is, is that the pandemic will pass in time. Many Chinese companies in the areas affected by the virus are now getting back to work. But it could be a hard road from here to there. Investors would do well to watch how the pandemic is playing out in places like Italy and other European countries for clues as to how it might affect the United States.