Nordstrom store in Chandler closing - blogThe spread of coronavirus has caused businesses of all kinds to shut their doors, leaving their employees furloughed or laid off. Some of the stores being hit the hardest are brick-and-mortar fashion retailers. Millions of Americans are struggling financially, and self-isolation activities don’t exactly warrant a fashionable new wardrobe. Despite Arizona allowing businesses to reopen earlier than many other states, stores haven’t been immune to the mass business closings going on across the country. The Chandler Fashion Center location of Nordstrom has announced that it will not be reopening due to the devastating impact of COVID-19.

Not the Only Fashion Retailer That is Struggling

Nordstrom will be closing 15 other locations along with the Chandler location. Nordstrom has a total of 378 locations, including the location in Scottsdale Fashion Square. There are also many locations of Nordstrom Rack, a store selling discounted items from the retailer, in Arizona. Unfortunately, this means the employees of the Chandler location will not have a job to return to when pandemic restrictions end. The closure is set to happen by August 2020. The rest of the locations that are closing will occur across 9 states
In-person fashion retailers were already struggling before the pandemic, as the popularity of shopping online has been growing exponentially. Nordstrom stated that the locations it chose to close were already underperforming before the pandemic hit. Only standard Nordstrom locations, not Nordstrom Rack locations, are closing. This may be a sign of the times- People simply don’t have the ability or desire to buy expensive clothing and accessories anymore. J. Crew and Neiman Marcus, a similar luxury department store, have filed bankruptcy due to the coronavirus pandemic.

Nordstrom Has Not Yet Declared a Bankruptcy Filing

Despite reporting a 40% decrease in sales due to the coronavirus pandemic, Nordstrom did not indicate any intention of filing for bankruptcy in the store closure announcement.  Perhaps, this is because of their strong stock following and price.  However, other retailers like JC PenneyTuesday Morning, and True Religion have filed Chapter 11 Bankruptcy in the wake of the pandemic.

Chapter 11 Bankruptcy is a chapter of bankruptcy that is most often utilized by companies that are struggling financially despite being large in size and having millions in assets and liabilities.
Therefore, a company filing Ch 11 can maintain operations during a Chapter 11 Bankruptcy.  Plus, the company’s top creditors will form a panel to decide how to address the company’s debts, and the company will have to cede final authority on large business decisions to this panel. This is compared to a Chapter 7, where the company will close up shop, surrender its assets, and not pay any of its debts. The owner of the company will not be held personally liable for the debts of the business.

Contributing to Arizona’s Unemployment Rate

Although there are payroll protection loans available to small businesses, and Arizona’s COVID-19 restrictions have begun to loosen, Arizona’s unemployment rate is still high. In late May and early June, Arizona saw new unemployment claims topping 20,000 each week. Before the pandemic occurred, new employment claims typically averaged about 3,500 per week in Arizona. The total of Arizonans that have lost their job since the pandemic began is nearly 650,000.

Other Arizona Businesses That Are Closing

Nordstrom at Chandler Fashion Center is far from the only business that will be closing in Arizona due to the coronavirus pandemic. Pier 1, an internationally inspired home décor retailer, has many locations in Arizona and is going out of business entirely. Tuesday Morning, a discount retailer that sells home goods and personal products has closed locations in Arizona. Caveman Burgers, Lilac Bakery,  and other small Phoenix-area restaurants are closing permanently. Arizona economists expect more businesses located in malls to close because of online competition, months of closure, and customers continuing to self-isolate at home.

During uncertain times, we can always rely on creditors to continue to pursue debts to the extent legally possible. If you are struggling financially and face garnishment, foreclosure, or repossession, bankruptcy may be the solution to your problems. We know times are tough, and that’s why our firm offers free consultations to those considering bankruptcy. We offer telephonic consultations so you can learn which chapters you are eligible for, how to proceed with your case, and how bankruptcy will help you from the safety and privacy of your home. Call to schedule your free consultation today.