Nordstrom on Monday said it will permanently close its three Jeffrey designer apparel stores in Atlanta, New York City and Palo Alto, California. Eligible employees will receive a separation package, including severance, benefits assistance and outplacement support, according to a company press release.
The department store in 2005 bought a majority interest in Jeffrey and hired founder Jeffrey Kalinsky as director of designer merchandising.
Kalinsky himself, now designer fashion director, is retiring from Nordstrom, the company said.
Nordstrom continues to prune its footprint during the COVID-19 pandemic, despite President and Chief Brand Officer Pete Nordstrom's statement Monday that, "There's always been a tremendous synergy between Nordstrom, Jeffrey Kalinsky and his successful luxury specialty stores."
Nordstrom and Jeffrey stores shared what he called "a relentless commitment to the customer, and a focus on providing them with the best possible service and merchandise offering," calling Kalinsky "an icon in the fashion industry."
But the disease outbreak, which has mandated store closures and thereby undermined that commitment to high-touch services, has forced Nordstrom to rethink its footprint. "While I'm disappointed in their decision to close Jeffrey stores, I understand it is the right decision for the business given the circumstances of this global crisis," Kalinsky said in his own statement.
Along with the company's recently announced plan to close 16 full-line department stores, the move announced Monday further waters down Nordstrom's luxury stance, as its off-price Nordstrom Rack stores so far remain untouched. That may be key to its viability longer term, according to Nick Egelanian, president of retail real estate firm SiteWorks. In fact, the company may have to go even further.
"Nordstrom can survive as a smaller chain and with Nordstrom Rack, but at some point, they may have to put all of their eggs into the Rack brand," he told Retail Dive in an email.
The Jeffrey closures also address what analyst Jane Hali, CEO of investment research firm Jane Hali & Associates, says is an over-emphasis on apparel, a segment with challenges exacerbated by the pandemic. "The Rack is the producer, they need to be less dependent on apparel, which continues to be slow," she told Retail Dive in an email. "We would like to see more home, beauty and wellness."