The weight of the coronavirus pandemic is forcing Nordstrom (NYSE:JWN) to permanently close 16 of its full-line stores.

The troubled department store chain's strength has been its off-price Nordstrom Rack chain, as well as online sales, and after a review of its business due to the COVID-19 outbreak, the retailer said it would close the full-price stores to "meet the accelerating changes in customer expectations."

Artists rendering of a Nordstrom store

Image source: Nordstrom.

Pivot to e-commerce

The closures represent 14% of its full-line store base, but only 4% of its total physical retailer operations in the U.S., Canada, and Puerto Rico. 

Nordstrom intimated e-commerce will have a much greater role to play going forward, noting more than half of its store sales involve tapping into its online site at some point, while a third of online sales involve a store experience.

CEO Erik Nordstrom said in a statement, "We've been investing in our digital and physical capabilities to keep pace with rapidly changing customer expectations. The impact of COVID-19 is only accelerating the importance of these capabilities in serving customers."

E-commerce represented one-third of Nordstrom's 2019 revenue and its off-price online business generated over $1 billion in sales.

Nordstrom will be incurring non-cash impairment charges associated with the closures, but says the restructuring is expected to result in savings of approximately $150 million. That's about 30% of the retailer's previously announced $500 million cost reduction program in operating expenses, capital expenditures, and working capital. 

All of Nordstrom's storms have been closed since March 17, but it will begin a phased reopening based on state and local laws.