Retail Layoffs And Store Closures 2020: Nordstrom Makes Cuts, Sephora Trims Staff, Ulta Closes Stores

More layoffs and store closures have plagued the retail industry as Nordstrom (JWN) looks to cut its workforce, Sephora plans staff cuts, and Ulta (ULTA) closes locations, pulling back on its planned new store openings.

Nordstrom filed a layoff notice with the Washington Employment Security Department last week, saying it would be laying off 521 workers from its Seattle headquarters. The layoffs are part of a non-store workforce reduction that is only a portion of a 20% staff cut the retailer has planned, Retail Dive reported.

In addition to the layoffs, Nordstrom previously announced that it would close 16 of its namesake stores along with its Trunk Club locations, and three specialty stores. Its off-price Rack stores will remain unaffected by the closures.

Beauty retailer Sephora is also cutting its workforce and will eliminate 117 full-time jobs or about 7% of its full-time corporate staff, Retail Dive reported. The cuts are part of a restructuring for the company, which closed its shop locations inside several JC Penney stores after the department store retailer filed for bankruptcy and closed underperforming stores.

The positions to be eliminated include roles at Sephora shops within JC Penney, which a company spokesperson told the news outlet “are corporate roles associated with Sephora’s JC Penney partnership” and are “no longer aligned with our changed priorities.”

Despite the layoffs, Sephora will reportedly add 132 net full-time jobs as it looks to decrease its “reliance on contractors,” the spokesperson said.

Also, in the beauty realm and making cuts is Ulta. The company said it will reduce its store footprint by 19 stores in Q2 and Q3 2020, cutting back on its previously announced plans to add more locations.

Ulta said based on the disruption to the retail industry caused by the coronavirus, it now expects to open only 30 stores in fiscal 2020 after pausing its plans in the first quarter of 2020 due to the COVID-19 pandemic.

Ulta said the store openings will resume in August, and more stores are expected to open in the U.S. in fiscal 2021 with its entry into Canada earmarked for mid-2021.

"We anticipate COVID-19 will influence longer-term market shifts and create new real estate opportunities, supporting our ambition to ultimately operate between 1,500 to 1,700 Ulta Beauty stores in the U.S.,” Mary Dillon, CEO at Ulta, said in a statement. “To do so, we are proactively optimizing our real estate portfolio and have made strategic decisions to temporarily reduce new store openings and close a limited number of stores this year.”

Shares of Nordstrom stock were trading at $15.76 as of 3:08 p.m. ET, up $1.12 or 7.65% while shares of Ulta were trading at $203.53, up $3.47 or 1.73% at the same time.