Nordstrom has released terrible outlook figures for 2016 sending shares plummeting. The news was followed by the announcement of 350 to 400 job cuts, mainly in its corporate centre and regional support teams. The problem is partly due to a sales slowdown at its regular-price stores. But management has also spoken about the costs of online. The e-commerce business, accounting for 20% of the total at Nordstrom, has a high variable cost structure driven by fulfilment and marketing costs, in addition to ongoing technology investments. Nordstrom, like other omnichannel department stores, has to maintain physical stores while taking on these costs related to the online business.