Nordstrom to lay off 400; Sports Chalet parent files for bankruptcy

Consumers’ increasing desire to use online platforms has given communicators many content marketing opportunities, but the shift is hitting retailers hard.

On Tuesday, Nordstrom announced that it would cut as many 400 jobs—roughly 6 percent of its workforce—by July.

The company said its job cuts will primarily affect corporate employees working in its Seattle headquarters and regional offices and will save the company roughly $60 million in the 2016 fiscal year. All terminated employees will get a severance package, though the company did not elaborate.

In a jargon-filled statement, the company said it plans to focus on technology and e-commerce:

Changes to the operating model are part of the company’s broader strategic plans to strengthen its foundation for future growth and improve productivity and service. The company has previously shared that it is continuing to make fundamental changes to serve customers better by leveraging its enterprise capabilities. Initiatives include a new operating model in its Technology group focused on strengthening its ability to deliver on e-commerce and digital initiatives, and proactively addressing opportunities to improve supply chain and marketing effectiveness.

[RELATED: How to eliminate corporate jargon and drive business performance with improved communications techniques.]

Nordstrom’s emphasis on technology has increased over the years. Fortune reported that 20 percent of Nordstrom’s sales now come from online shopping—a 12 percent increase compared with 2011—but its online focus comes at a price:

Nordstrom now gets 20% of sales online, up from 8% just five years ago. That growth, spurred by investments in new distribution facilities, computerized systems and equipping stores to help fill online orders way before it became the industry standard, has come at a cost. So the retailer’s executives announced a plan to rein that it in by focusing on the most essential initiatives, rather than working on countless projects of only margin benefit.

Nordstrom’s move to eliminate part of its workforce comes after recent, similar announcements by Wal-Mart, which cut 100 jobs at its headquarters in Arkansas, and Macy’s, which is slashing 4,800 jobs and closing 40 stores this year.

Nordstrom’s announcement should come as no surprise, The Seattle Times reported:

The warning signs came after a dismal third quarter last year, followed by a fourth quarter—including the all-important holiday shopping season—that failed to live up to analysts’ expectations.

Sales were weak at its full-line stores, which make up the bulk of its retail business. Even its Nordstrom Rack business saw comparable sales—sales at stores open at least a year—fall in the fourth quarter.

After Nordstrom cut its outlook for the year in November, shares plunged as much as 20 percent. Its shares, which closed at $52.33 Monday and remained there in after-hours trading following the cutback news, are down 32 percent from this time last year.

Nordstrom is not alone in announcing losses this week. The Consumerist reported that the parent company of sporting chains Sport Chalet, Eastern Mountain Sports and Bob’s Stores has filed for bankruptcy:

With the dust just beginning to settle surrounding the bankruptcy and 140-store closure of sporting goods retailer Sports Authority, another, albeit smaller, outdoor gear retailer is following suit. Vestis Retail Group, the operator of brand Eastern Mountain Sports, Bob’s Stores, and Sport Chalet, officially filed bankruptcy papers today, outlining a restructuring plan that focuses on closing 56 stores.

Bloomberg reported that online shopping also contributed to the retail group’s demise:

“The continuing shift in consumer behavior away from traditional brick-and-mortar retailers and toward online-only stores, together with increased competition from big-box and specialty sporting goods retailers, have contributed to an industrywide weakness,” Mark Walsh, chief executive officer of Vestis, said in a court filing.

As retailers continue to struggle, business executives and marketers will have to strike a balance between serving their customers and adapting to consumers’ migration to online platforms.

So far, Nordstrom is keeping its eye on what its customers want. Blake Nordstrom, the company’s co-president, said the following in its statement:

We will never change our commitment to serving customers, but recognize how they want to be served has been changing at an increasingly rapid pace. Meeting our customers’ expectations means we must continually evolve with them. We see opportunities to create a more efficient and agile organization that ensures we’re best positioned to achieve our goals.

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