Nordstrom Inc. is poised for another strong year.
This story first appeared in the May 10, 2012 issue of WWD. Subscribe Today.
“We think it’s going to be a great 2012,” Blake Nordstrom, president of Nordstrom Inc., said at the retailer’s annual meeting on Wednesday in Seattle, which was upbeat, devoid of any controversy, and marked by executives noting sustained investments in technology and its number-one competitive edge — customer service.
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Nordstrom further lifted the mood when he said the company will today report a 13.7 percent total sales increase for the first quarter, and a comparable-store increase of 8.5 percent. In 2011, Nordstrom posted a 12.7 percent sales rise, and a 7.2 percent comparable-store increase. He also cited a strong rate of inventory turn, 5.6 percent.
Nordstrom cited areas where the company is investing, including personal stylists. The company has 1,300 stylists, or three times as many as two years ago. He also said the company is expanding its mobile point of sale introduced with last year’s summer anniversary sale.
“E-commerce represents a tremendous growth opportunity for us,” Nordstrom said. “We are investing a lot of energy, time and resources.…Last September, we went to free shipping and returns. It’s very expensive,” but necessary, “if we want to be the customers’ choice online. They were really demanding it.” He also said the online merchandising is expanding since customers expect “the full choice” online.
Nordstrom said he couldn’t be more pleased with last year’s purchase of HauteLook, the flash-sale site, which is having some “pretty good gains” and gathering members, with more than eight million subscribers. Nordstrom this year bought a stake in Bonobos.
Nordstrom also recently started locating Rack outlets near its full-line Nordstrom stores in Dallas and Seattle, among other locations. Rather than the stores cannibalizing sales from each other, Nordstrom said, “We think there’s a healthy synergy having Rack next to our full-line store.” Rack surpassed $2 billion in sales last year.
At the meeting, Nordstrom’s 20-year-old tradition of recognizing top vendors was continued. Pete Nordstrom, president of merchandising, gave the store’s “partners in excellence” award to Kate Spade New York and Vince. He said Kate Spade ranks as Nordstrom’s 21st largest vendor, with nearly $60 million in sales at Nordstrom stores last year, and was being recognized for successfully expanding beyond handbags to home, eyewear, fragrance, hosiery and women’s apparel. “We sold 43,000 Kate Spade iPhone cases,” he said. He also said his company was among the first to pick up Kate Spade ready-to-wear in 2009.
Pete Nordstrom characterized Vince as “a pretty coveted brand not superbroadly distributed,” ranking as Nordstrom’s 51st largest vendor, generating $39 million in sales at the store last year.
Erik Nordstrom, president of stores, discussed how the company’s service culture pervades the organization by citing one member of the housekeeping crew who discovered some Nordstrom packages in the parking lot of a Connecticut store, and tracked down the customer all the way to John F. Kennedy Airport in New York, where he returned the packages. The worker wouldn’t accept car fare from the customer. “That type of motivated accountability, we work on it a lot,” Erik Nordstrom said. “We don’t nail it all the time, but fortunately we have people who care a lot about customers.”