Advertisement
Advertisement

The Escondido Nordstrom is permanently closing this summer

A view of the Nordstrom department store, one of the anchor tenants of Westfield North County, on May 11, 2020 in Escondido, California. The store will permanently close this summer.
(Sam Hodgson / The San Diego Union-Tribune)

After 34 years serving shoppers in Escondido’s Westfield North County Mall, Nordstrom is exiting

The Nordstrom department store in Escondido is permanently closing its doors this summer, ending a 34-year tenure as an anchor tenant of the Westfield North County shopping mall.

Escondido is one of 16 Nordstrom stores forced to close permanently by August due to COVID-19’s squeeze on brick-and-mortar retail. Six of those stores are based in California, where retailers are expecting a slow awakening from the government-mandated shutdown.

The sites being closed are all “full-line” locations, which are often multi-level stores. Nordstrom Rack, the off-price locations, are not affected.

Escondido’s Nordstrom store opened during the heyday of shopping malls in 1986 as part of Westfield North County Fair, now called Westfield North County. The mall was a behemoth of shopping plazas at the time, breaking a ribbon-cutting record for opening 122 stores all on the same date. On opening day, confetti shot from rooftop cannons, 5,000 helium-filled balloons and seven huge hot-air balloons were let loose into the sky.

The opening-day party is a sharp historical contrast to today’s retail reality. COVID-19 has transformed shopping malls into eerie ghost towns. Struggling retailers, already clobbered by online shopping, are gassing out quickly.

“For an industry that’s been ailing for years, the coronavirus pandemic is a body blow many retailers won’t survive,” S&P analyst Sarah Wyeth wrote in a research note last week.

Nordstrom’s news came as the retail industry was reeling from other hardships this month.

Clothing chain J. Crew and luxury retailer Neiman Marcus filed for Chapter 11 bankruptcy protection in the first week of May, facing mounting losses while their shops sat empty. Both Macy’s and JCPenney have sent warnings of upcoming financial turmoil, with possible bankruptcies looming on the horizon long before the pandemic swept through the country.

As of last week, about 30 percent of the 125 restaurant and retail companies tracked by S&P Global Ratings are now showing signals of an upcoming bankruptcy or liquidation — with credit ratings that give them a 1-in-2 chance of defaulting on debts.

The economic shutdown and lingering social-distancing mandates will elicit a broad shakeout of retail, Wyeth said, as some will need to reduce physical space and evolve their models to reach the “post-pandemic consumer.”

Shopping malls will likely suffer in that evolution.

“If there were any doubts about the eventual demise of many American malls, the impact of the pandemic will likely dispel them,” Wyeth wrote.

Westfield did not respond to a request for comment.

Retail strategy consultant Toopan Bagchi at The Navio Group said retailers are likely to see even more “digitally enabled shopping, resulting in lower store foot traffic.” Brick-and-mortar retail will need to speed its transformation in a pandemic-prone world.

“Optimistically, one year out, if a vaccine is available, we expect to transition to a ‘new normal,’ but one with far higher adoption of digital shopping, contactless payments and time spent at home,” Bagchi wrote in an email.

This trend seems to be on the mind of Eric Nordstrom, CEO of Nordstrom.

“We’ve been investing in our digital and physical capabilities to keep pace with rapidly changing customer expectations,” Nordstrom said in a statement. “The impact of COVID-19 is only accelerating the importance of these capabilities in serving customers. More than ever, we need to work with flexibility and speed. Our market strategy helps with both, bringing inventory closer to where customers live and work, allowing us to use our stores as fulfillment centers to get products to customers faster, and connecting digital and physical experiences with services like curbside pickup and returns.”

Nordstrom expects to save $150 million with these closures and new retail strategies, the company said in a statement.

It is unclear how many workers will lose their jobs in Escondido as a result of the closure. Nordstrom did not respond to a request for clarification by press time, nor are they required to file a notice with California’s Employment Development Department due to a temporary suspension of that requirement by Gov. Gavin Newsom.


Advertisement