About Nordstrom, Inc.

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 and over 190 off-price outlet stores (Nordstrom Rack) in nearly 40 states and online. It also operates a pair of Jeffrey luxury boutiques, a "Last Chance" clearance store, online private sale site HauteLook, and personalized clothing service Trunk Club. With its easy-return policy and touches such as thank-you notes from employees, Nordstrom has earned a reputation for top-notch customer service. Nordstrom family members, who own about 25% of the retailer's stock, closely supervise the chain.

Operations

The family-run company operates two business segments. The Retail segment, which accounted for 98% of Nordstrom's revenue in fiscal 2016 (ended January 2016), includes sales from its full-line and Nordstrom Rack stores as well as from its Nordstrom.com, nordstromrack.com, Hautelook.com, Trunk Club.com, Jeffrey, and Canadian operations. Its Credit segment (3% of sales) owns a federal savings bank, Nordstrom fsb, through which it offers a private-label credit card, two co-branded Nordstrom VISA cards, and a debit card for Nordstrom purchases. The cards also include a loyalty program that rewards shoppers depending on their spending levels.

Nordstrom's full-line stores generated nearly 53% of its net sales in FY2016, while its Nordstrom Rack stores contributed another roughly 25%. Its fast-growing Nordstrom.com channel generated 16% of net sales, while its Nordstromrack.com and Hautelook channels combined made up nearly 4%.

By product, the company generated 31% of its FY2016 net sales from women's apparel, while shoe sales made up another 23%. The rest of its net sales came from men's apparel (17%), women's accessories (12%), cosmetics (11%), kid's apparel (3%), and other items.

Geographic Reach

Nordstrom has nearly 334 full-line and Nordstrom Rack stores in 39 US states, and three Nordstrom full-line stores in Canada. California is the retailer's largest market with 78 full-line and Rack stores. Other major markets for the chain include Florida, Texas, and Washington.

Sales and Marketing

Nordstrom has boosted its advertising spend in recent years. It spent $227 million in FY2016 on advertising (net of vendor allowances), up on $195 million in FY2015 and $167 million FY2014.

Financial Performance

Nordstrom's revenue has been marching onward since 2010, advancing a further 7.5% in fiscal 2016 to $14.4 billion. Its program of net store openings continued, with the opening of five full-line Nordstrom stores (two in Canada) and 27 Nordstrom Rack stores pushing up growth.

Full-price net sales in full-line Nordstrom and Nordstrom Rack increased 2.7%, while off-price sales in Nordstrom Rack climbed 9.9%. Shoes and Cosmetics was the Group's best-performing category, while the South was the best-performing region. Nordstromrack.com/HauteLook experienced outsized growth, with a net sales increase of 47%.

However, despite the revenue growth, net income has been less impressive in recent years, and fell 17% in fiscal 2016 to $600 million. Buying and occupancy costs relating to new store openings dragged down profits, as did higher expenditure on sales and growth initiatives relating to Canada and Trunk Club.

Cash from operations more than doubled to $2.5 billion due to the sale of a substantial majority of the company's US Visa and private label credit card portfolio to TD.

Strategy

Nordstrom is all about increasing market share, across all retail channels and by entering new markets. Indeed, in 2015 the retailer added stores in relatively untapped Canada in Ottawa and Vancouver, with more stores planned in Toronto in 2016 and 2017. In 2015, the company opened five Nordstrom full-line stores (Ottawa, Ontario; San Juan, Puerto Rico; Vancouver, British Columbia; Minneapolis, Minnesota; and Wauwatosa, Wisconsin) and 27 Nordstrom Rack stores. Additionally, in 2015, they closed one Nordstrom full-line store in Buford, Georgia.

To date in 2016, the company has opened three Nordstrom Rack stores (Lafayette, Louisiana; Orem, Utah; and Virginia Beach, Virginia). A further three full-line Nordstrom stores will be opened in the remainder of 2016 (two in Toronto, Ontario and one in Austin, Texas), as well as the opening of 18 additional Nordstrom Rack stores.

The chain also plans to open its first full-line store Manhattan -- an important, high-profile retail market -- in 2019.

The rapid expansion its its Nordstrom Rack stores is an effort to reach out to less-affluent shoppers.

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. Indeed, in late 2015, the company projected that its online sales would was on track to contribute about 20% to its overall sales, representing a major part of its business. The retailer's recent acquisition of Trunk Club presents an opportunity to grow its online sales, particularly with men.

In October 2015, the company sold off a substantial majority of its US Visa and private label credit card portfolio to TD Bank Group, and entered into an agreement for the bank to be the exclusive issuer of Nordstrom's consumer credit cards.

Mergers and Acquisitions

In August 2014, Nordstrom purchased Trunk Club, a personalized clothing service for men, for $350 million. The acquisition allowed the retailer to offer a high-tough personalized shopping experienced through the convenience of an online platform (trunkclub.com).

Company Background

In 2011, extending its reach to the private-sales arena, the company acquired e-tailer HauteLook for $180 million in stock. 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 continued 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).

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) 373-4035

Stats

  • Employer Type: Public
  • Stock Symbol: JWN
  • Stock Exchange: NYSE
  • Co-President: Blake W. Nordstrom
  • Co-President: Peter E. Nordstrom
  • EVP and Co-President; President, Nordstrom.com: Erik B. Nordstrom

Major Office Locations

  • Seattle, WA

Other Locations

  • Anchorage, AK
  • Chandler, AZ
  • Phoenix, AZ
  • Scottsdale, AZ
  • Tucson, AZ
  • Arcadia, CA
  • Bakersfield, CA
  • Brea, CA
  • Canoga Park, CA
  • Cerritos, CA
  • Chino, CA
  • Colma, CA
  • Commerce, CA
  • Corte Madera, CA
  • Costa Mesa, CA
  • Culver City, CA
  • East Palo Alto, CA
  • Escondido, CA
  • Fremont, CA
  • Fresno, CA
  • Glendale, CA
  • Huntington Beach, CA
  • Irvine, CA
  • Laguna Hills, CA
  • Los Angeles, CA
  • Mission Viejo, CA
  • Montclair, CA
  • National City, CA
  • Newark, CA
  • Ontario, CA
  • Orange, CA
  • Oxnard, CA
  • Palm Desert, CA
  • Palo Alto, CA
  • Pleasanton, CA
  • Redondo Beach, CA
  • Riverside, CA
  • Roseville, CA
  • Sacramento, CA
  • San Bernardino, CA
  • San Diego, CA
  • San Francisco, CA
  • San Jose, CA
  • San Leandro, CA
  • San Marcos, CA
  • San Mateo, CA
  • Santa Ana, CA
  • Santa Barbara, CA
  • Temecula, CA
  • Thousand Oaks, CA
  • Upland, CA
  • Walnut Creek, CA
  • Woodland Hills, CA
  • Boulder, CO
  • Broomfield, CO
  • Colorado Springs, CO
  • Denver, CO
  • Englewood, CO
  • Lakewood, CO
  • Littleton, CO
  • Lone Tree, CO
  • Farmington, CT
  • Washington, DC
  • Newark, DE
  • Boca Raton, FL
  • Brandon, FL
  • Clearwater, FL
  • Coral Gables, FL
  • Gainesville, FL
  • Jacksonville, FL
  • Miami, FL
  • Naples, FL
  • Orlando, FL
  • Palm Beach Gardens, FL
  • Sunrise, FL
  • Tampa, FL
  • University Park, FL
  • Wellington, FL
  • Alpharetta, GA
  • Atlanta, GA
  • Buford, GA
  • Honolulu, HI
  • Cedar Rapids, IA
  • Dubuque, IA
  • West Des Moines, IA
  • Boise, ID
  • Chicago, IL
  • Naperville, IL
  • Northbrook, IL
  • Oak Brook, IL
  • Orland Park, IL
  • Schaumburg, IL
  • Skokie, IL
  • Indianapolis, IN
  • Overland Park, KS
  • Boston, MA
  • Burlington, MA
  • Natick, MA
  • Peabody, MA
  • Westwood, MA
  • Annapolis, MD
  • Baltimore, MD
  • Bethesda, MD
  • Columbia, MD
  • Gaithersburg, MD
  • Towson, MD
  • Upper Marlboro, MD
  • South Portland, ME
  • Clinton Township, MI
  • Grand Rapids, MI
  • Novi, MI
  • Troy, MI
  • Bloomington, MN
  • Ballwin, MO
  • Saint Louis, MO
  • Charlotte, NC
  • Durham, NC
  • Cherry Hill, NJ
  • Edison, NJ
  • Freehold, NJ
  • Livingston, NJ
  • Paramus, NJ
  • Rockaway, NJ
  • Short Hills, NJ
  • Wayne, NJ
  • Henderson, NV
  • Las Vegas, NV
  • Brooklyn, NY
  • Flushing, NY
  • Garden City, NY
  • Huntington Station, NY
  • Manhasset, NY
  • New York, NY
  • Westbury, NY
  • White Plains, NY
  • Beachwood, OH
  • Beavercreek, OH
  • Cincinnati, OH
  • Cleveland, OH
  • Columbus, OH
  • Westlake, OH
  • Oklahoma City, OK
  • Tulsa, OK
  • Beaverton, OR
  • Clackamas, OR
  • Eugene, OR
  • Happy Valley, OR
  • Portland, OR
  • Salem, OR
  • Tigard, OR
  • Allentown, PA
  • Elizabethtown, PA
  • King Of Prussia, PA
  • Philadelphia, PA
  • Pittsburgh, PA
  • Willow Grove, PA
  • Providence, RI
  • Columbia, SC
  • Arlington, TX
  • Austin, TX
  • Dallas, TX
  • El Paso, TX
  • Frisco, TX
  • Houston, TX
  • Hurst, TX
  • Plano, TX
  • San Antonio, TX
  • Southlake, TX
  • Sugar Land, TX
  • Sunset Valley, TX
  • The Woodlands, TX
  • Farmington, UT
  • Murray, UT
  • Salt Lake City, UT
  • Sandy, UT
  • Arlington, VA
  • Dulles, VA
  • Fairfax, VA
  • Mc Lean, VA
  • Norfolk, VA
  • Richmond, VA
  • Sterling, VA
  • Woodbridge, VA
  • Algona, WA
  • Bellevue, WA
  • Lynnwood, WA
  • Spokane, WA
  • Spokane Valley, WA
  • Tacoma, WA
  • Tukwila, WA
  • Vancouver, WA
  • Wauwatosa, WI
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