What happened

Shares of Nordstrom (NYSE:JWN) were down on Friday afternoon after new restrictions to limit the spread of the novel coronavirus raised questions about the company's ability to continue operating its online store.

As of 1 p.m. EDT today, Nordstrom's shares were down about 5.8% from Thursday's closing price.

So what

The stay-at-home order issued by California's governor on Thursday will almost certainly shut down a fulfillment center in San Bernardino that Nordstrom uses to fill online orders, one of three in the United States. 

A Nordstrom sign on the outside of a store.

Image source: Nordstrom.

Nordstrom has been betting on its online storefront to generate revenue since shutting down all of its stores in the U.S. and Canada earlier this week. The company has been running a 25%-off sale online in a bid to keep inventory moving. But if it can't fill orders, it can't continue.

Nordstrom has two other fulfillment centers, in Elizabethtown, Pennsylvania, and Cedar Rapids, Iowa. It was expected to open a fourth site this spring, a new omnichannel center that will fulfill both retail and online orders in Riverside, California. 

It's not currently clear how much of its inventory is shipped exclusively from the San Bernardino center. 

Now what

Nordstrom has already withdrawn the full-year guidance that it issued at the beginning of March, before the scale of the pandemic's impact in North America became clearer. The company had said that it will keep its online stores for the duration of the brick-and-mortar shutdown, and that it will continue to offer order pickup at its full-line retail locations for as long as possible. 

Nordstrom's online business has been its best bet to keep some revenue coming in (and some inventory turning over) while it weathers the storm. If that's now at risk, CEO Erik Nordstrom (and Nordstrom's investors) will need a new plan.

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