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