Nordstrom's total company digital sales grew 4 percent and represented 30 percent of the business.

Nordstrom Inc. is lauded as one of the best in retail, but Wall Street is worried that might not be enough.

Shares of the department store fell 8.7 percent to $50.48 Friday after J.P. Morgan analyst Matthew Boss downgraded the issue to “underweight” from “neutral” after a meeting with the firm’s top brass.

Boss said that over the near term, Nordstrom’s management “sees no silver bullets in the barrel planning forward receipts to today’s flattish top-line trend…with an accelerating brick-and-mortar to e-commerce shift yet to find an equilibrium and costs to drive customer traffic accelerating.”

That spooked investors holding shares of department stores, sending the sector reeling. Among the key decliners were Kohl’s Corp., down 8 percent to $51.14; J.C. Penney Co. Inc., 7 percent to $8.62; Macy’s Inc., 6.7 percent to $37.47, and Dillard’s Inc., 4.6 percent to $63.50.

Department stores — which have been left for dead several times before, only to bounce back and prove their relevance — are in a particularly pitched battle, not as much against each other but against their own business models, their customers’ needs and the e-tailing giant Amazon.

Although the lion’s share of business is still done in stores, retailers need to increasingly cut price to move goods and drive traffic, which has been sagging as more shoppers buy online and focus on experiences and tech more than fashion.

Fitch Ratings said recently that retail sales could continue to grow by 3 to 4 percent, but more than half of that growth would come from the web.

“The dividing line between best-in-class retailers and market share donors is increasingly going to be determined by which retailers can cater to the evolving landscape,” Fitch said. “Those that find success have invested in the omnichannel model and have differentiated their products and customer service to draw customers in.”

Nordstrom has certainly been one of those stores that has invested heavily in tech, pouring money into Bonobos and Trunk Club and also spending to provide more of a seamless shopping experience between the web and its stores.

But Boss said there were also no silver bullets to solve the next few years for Nordstrom, noting the firms’ top-line growth has moderated to the low to mid-single-digit range. Nordstrom’s leaders cited “tighter expense control as a near-term fix rather than long-term model solution clarifying its mid-teens [return on invested capital] target as more an ‘aspiration’ rather than near-term reality.”

Nordstrom stock has been on a run, gaining 57 percent over the past six months and the analyst pegged it with a target price of $48, or 6 times projected earnings before interest, taxes, depreciation and amortization for fiscal 2018.

Even though all of Nordstrom’s 123 full-line stores are profitable today, Boss noted, “The fleet is not immune from larger picture rationalization with mall rationalization a cyclical reality — similar to urban retail consolidation at the expense of suburban malls in past.

“Copresident Blake Nordstrom spoke to today’s flattish same-store-sales run-rate as unacceptable and unsustainable for multi-year bottom-line growth given investments in place [including expansions into Canada and New York] and continued technology investment necessary to drive traffic,” Boss said. “Specifically, management cited full-line, brick-and-mortar traffic levels as the worst since 1972 with the accelerating model shift from brick-and-mortar to online yet to reach equilibrium citing ‘no easy answer’ to restimulating foot traffic.”

Nordstrom did not reply to a WWD query on the downgrade Friday.

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