Nordstrom, Inc.

  • Overview

Service with a smile is a part of Nordstrom's corporate culture. One of the nation's largest upscale apparel and shoe retailers, Nordstrom sells clothes, shoes, and accessories through more than 115 Nordstrom department stores about 125 off-price outlet stores (Nordstrom Rack) in more than 30 states and online. It also operates a pair of Jeffrey luxury boutiques, a "Last Chance" clearance store, and newly-acquired online private sale site HauteLook. With its easy-return policy and touches such as thank-you notes from employees, Nordstrom has earned a reputation for top-notch customer service. Members of the Nordstrom family, who own about 25% of the company's stock, closely supervise the chain.

Geographic Reach

Nordstrom has stores in 31 US states and the District of Columbia. California is the retailer's largest market with 65 full-line and Rack stores. Other major markets for the chain include Florida, Texas, and Washington.

Operations

The family-run company has consolidated its catalog and Internet businesses into one unit called Nordstrom Direct. The direct channel, which accounts for about 10% of total sales, is outpacing the rest of Nordstrom in terms of growth, with a net sales increase of 39% in fiscal 2013 vs. 2012. The company's full-line Nordstrom stores account for about two-thirds of total sales. The firm also owns a federal savings bank, Nordstrom fsb, through which it offers a private-label credit card, as well as two co-branded Nordstrom VISA cards.

Financial Analysis

Buoyed by the improving economy, Nordstrom's fiscal 2013 (ends January) sales topped $12 billion, an increase of about 12% vs. the prior year. Net income grew by nearly 8% over the same period. Indeed, Nordstrom has enjoyed double-digit sales growth over the past three years and rising profits. The increase in fiscal 2013 sales was driven by a 7% gain in same-store sales and strong performances across all of the company's retail channels, including e-commerce (Nordstrom's fastest growing business). Indeed, direct sales increased 39% in fiscal 2013 vs. the prior year, while sales at the company's Nordstrom Rack stores increased nearly 20%. Sales at the retailer's full-line Nordstrom stores increased 6%.

Strategy

Nordstrom is all about increasing market share, across all retail channels and by entering new markets. Indeed, the retailer has plans to enter Canada with four full-line stores and with the potential for a total of eight to 10 full-line stores and 15 to 20 Rack stores. Also, Nordstrom is accelerating the pace of expansion of its Rack stores with plans to number more than 230 by the end of 2016, up from about 125 at present. The chain has also announced plans to open its first full-line store in Manhattan, an important, high-profile retail market.

The chain also continues to invest in its fast-growing e-commerce business to expand the merchandise selection, and to enhance the website and mobile experience with improvement to search, navigation, and checkout, and increasing the speed of fulfillment and delivery.

Mergers and Acquisitions

Extending its reach to the private-sales arena, the company acquired e-tailer HauteLook for $180 million in stock in 2011. HauteLook, launched in 2007, offers discounted apparel, accessories, and home decor to registered Web shoppers in the US and Canada. As part of the deal, HauteLook became a subsidiary of Nordstrom, and it continues to be based in Los Angeles and led by founder Adam Bernhard. Nordstrom took notice of HauteLook amid the rising popularity of (and sales generated through) private-sale sites during the recession; also referred to as flash sales, sites such as HauteLook provide steep discounts on name-brand merchandise for short periods of time (generally 24 to 48 hours).

Ownership

Patriarch Bruce A. Nordstrom and other members of the Nordstrom family control about a quarter of the company's shares.

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Nordstrom, Inc.


1617 6th Ave
Seattle, WA 98101-1707
Phone: 1 (206) 628-2111
Fax: 1 (206) 3734035
www.nordstrom.com

STATS


  • Employer Type: Public
  • Stock Symbol: JWN,
  • Stock Exchange: , NYSE
  • Chairman: Enrique Hernandez
  • EVP and CFO: Michael Koppel
  • President and Director: Blake Nordstrom

Major Office Locations

  • Seattle, WA
  • Seattle, WA

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