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Nordstrom is laying off more than 200 workers at its supply chain

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A quick dive:

  • Nordstrom plans to cut 222 jobs at distribution center in Cedar Rapids, Iowa, reports Warning filed by the state.
  • The layoffs will take place next month, on October 18, according to the report. Nordstrom did not immediately respond to a request for comment.
  • The distribution center is one of the two supply chain facilities that Nordstrom operates in Iowa, which together represent 1.5 million square feet of space and are the retailer’s only locations in the Midwest, according to the filings.

Dive Insight:

This was reported by the press secretary of Nordstrom Shoe news that cuts occur when Nordstrom moves some of its products to other facilities.

Pete Nordstrom, President of Retail and Chief Brand Officer, analysts said in August that Nordstrom is working to improve the consistency and predictability of the flow of units through its supply chain and to improve productivity in its distribution and fulfillment centers.

The company also prioritizes speeding up shipping and expanding market-level selection for in-store purchases, as well as same-day and next-day pickup, Nordstrom said. Anne Braman, chief financial officer, also noted in an analyst call that the company has reduced the number of days it takes to deliver to customers from its supply chain.

The supply chain effort is part of Nordstrom’s “Closer to You” initiative, an expansion effort next-day pickup in more stores and more markets.

In a Friday note, Cowen analysts noted that 40% of Nordstrom’s customers are on the West Coast, while many of its distribution centers have historically been built in Iowa and Pennsylvania.

In a note that followed a call with Nordstrom management, Cowen analysts said Nordstrom is working to optimize its California plant to integrate the fulfillment of its full and banner ads. The retailer is also building a dedicated Rack team in its supply chain to sort and label Rack inventory to smooth flow and improve productivity.

Executives also noted supply chain optimization efforts to offset increased labor and fulfillment costs.

The company has recently taken other steps to strengthen its supply chain. In March, Nordstrom announced the hiring of three veterans of the off-price world, including Stacey Lipa, who has worked at Five Below and Target, as the new vice president of supply chain at Nordstrom’s Rack banner.

While Nordstrom posted relatively strong numbers it lowered its expectations for the year in the last quarter as consumers cut back on voluntary purchases. Inflation has hit retailer Rack’s customers particularly hard, while its full-line items performed well in the second quarter, with sales up more than 14%.

Heading into the last half of a volatile year, Nordstrom scaled back its sales plans and reduced inventory to get rid of underperforming items.

https://www.retaildive.com/news/nordstrom-lays-off-200-workers-supply-chain-facility/632549/ Nordstrom is laying off more than 200 workers at its supply chain

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