Please ensure Javascript is enabled for purposes of website accessibility

Shares of Nordstrom Fall as Concerns Grow About Online Business

By John Rosevear - Mar 23, 2020 at 11:05AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If its fulfillment centers are closed, it can't deliver online orders.

What happened

Shares of upscale retailer Nordstrom (JWN -1.75%) were down again on Monday, on growing investor concerns about the company's likely losses amid the coronavirus pandemic.

As of 11:30 a.m. EDT, Nordstrom's shares were down about 12.9% from Friday's closing price.

So what

Concerns are growing around Nordstrom's ability to keep its online storefronts up and running as state governments shut down nonessential businesses to help limit the spread of the COVID-19 virus.

A Nordstrom sign on the outside of a store.

Image source: Nordstrom.

Here's the problem: Nordstrom's online storefronts are supported by three fulfillment centers, located in California, Iowa, and Pennsylvania. The governors of California and Pennsylvania have already ordered "nonessential" businesses to shut down, and Iowa may be set to follow shortly. 

Nordstrom closed all of its brick-and-mortar stores in the U.S. and Canada last week. Investors have been hoping that the company could use its online stores to help turn over inventory and generate at least some revenue while its physical stores are shut down. But if its fulfillment centers are closed -- as seems imminent -- the company won't be able to fill any orders, online or otherwise.

Now what

Nordstrom already withdrew the full-year guidance that it issued just a few weeks ago, at the beginning of March, when it announced its plan to shut down stores and weather the crisis. But if it can't do business online, CEO Erik Nordstrom (and investors in the company's battered stock) will need a new plan -- soon. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Nordstrom, Inc. Stock Quote
Nordstrom, Inc.
$20.76 (-1.75%) $0.37

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.