Many retailers have been hit hard throughout the COVID-19 pandemic as stores remain shuttered and customers stick to their screens. While e-commerce is thriving, it's still a relatively small piece of the pie for most retailers, and they're expanding their cash holdings to stay afloat until this rough patch evens out.

Taking extra measures

Nordstrom (NYSE:JWN), one of the better-performing department store operators with a thriving digital program, has taken several precautionary actions to make sure it stays solvent while the novel coronavirus makes its way around the world. 

A Nordstrom store with a couch and chairs.

Image courtesy of Nordstrom, Inc.

  • In addition to $850 million in cash at the beginning of the quarter, the company drew down an $800 million line of credit.
  • The company issued $600 million in debt financing.
  • The company suspended quarterly dividends and share repurchases.
  • The company is reducing operating expenses and capital expenditures by $500 million.

Now, the company is amending its line of credit to give itself greater flexibility. Both Pete and Erik Nordstrom, who serve in the president and CEO roles, respectively, have also declined their salaries through September. 

CFO Anne Bramman said, "These measures will provide Nordstrom with additional liquidity and flexibility not just for the short-term but over the longer term as we emerge from this unprecedented time."

Hoping for the best

Analysts note that retailers who are now struggling will need retain working capital to cover new inventories when shops reopen again if they are to have any chance of gaining back revenue. 

Nordstrom saw a 1.3% increase in net sales in its fourth quarter driven by its omnichannel program. Erik Nordstrom said, "As we move forward, we are further leveraging digital capabilities and scaling our market strategy to drive sales and earnings growth."