Nordstrom Notifies Landlords That It Will Pay Only Half of Its Rent for the Year
Nordstrom is the latest retail tenant to find itself at odds with its landlords.
The department store has reportedly notified the property owners of its namesake and off-price Rack outposts that it will pay only half of its rent costs for the rest of 2020.
According to Retail Dive, a letter from president of stores Jamie Nordstrom to landlords on Friday showed that the company would use comps as the basis for its decision to make its occupancy payments. The report suggested that Nordstrom would pay “up to a full reconciliation should 2020 sales reach 90% of sales made in that location in 2019.”
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So JWN is telling its landlords – FLS and Rack both – to accept half the lease payments now or Jamie will pull a Judge Smales on them: "You'll get nothing and like it."
This is a Chapter 11 threat, isn't it? IMO that is going to happen eventually, since it is the tidiest way to escape these obligations entirely, but it still is shocking to see Nordstrom play hardball like this.
It's absolutely incredible to see how quickly this company has basically collapsed. If I had 2.5MM shares and my name was on the door, I would liquidate at the open tomorrow and go hand-build a cabin in in the woods near Lake Clark.