NORDSTROM’S MIDWESTERN EXPANSION
Byline: Elaine Glusac
SCHAUMBURG, ILL. — Service, trust, understanding the customer: to hear James Nordstrom tell it, there is no secret behind the success Nordstrom stores have achieved in the Midwest, just common sense.
The folksy co-chairman of the Seattle-based specialty department store chain — employees call him “Mr. Jim” — visited the Chicago area recently to open the company’s third suburban store, this one at Woodfield Mall here.
Speaking at a benefit luncheon, he put a humble face on the $3.6 billion grossing chain.
“I don’t think we’ve had an experience that’s been more of a surprise to us than Chicago, our Oakbrook store,” said Nordstrom.
No doubt it was a welcome surprise. Oakbrook Center Nordstrom, opened in 1991, had estimated sales of $100 million in 1994 and is among the top grossing stores in the Nordstrom portfolio, according to analyst Jennifer Black Groves of Black & Co., Portland, Ore.
And the Woodfield store is intended as a complement. “Out of the box, Woodfield should approach $80 million [in sales annually], with the potential to grow to $100 million,” said Groves. She went on to say that the Midwest sales figures are “incredible,” when compared with older store receipts, which hovered between $40 and $45 million.
The reason for this surge is the store’s aggressive expansion strategy. “They are only going into incredible malls, the A-plus malls,” said Groves. “And because of [Nordstrom’s] success, developers are coming to them, which gives them leverage to negotiate leases.”
Woodfield Mall draws 14 million visitors annually and is the top tourist destination in Illinois. With the addition of Nordstrom and a new wing this summer, the suburban mall will exceed Minneapolis’s Mall of America in total selling square footage.
“We had long known that the Woodfield Mall was one of the most successful — if not the most successful — malls in the United States, and we always wanted to be here,” said Nordstrom.
But, aggressive business strategy is not what got the company the leverage it has today. According to Nordstrom, that can be attributed to the company’s service philosophy, which “came from [being in] the shoe business, where you have to wait on each person individually and bring out the shoes and measure the feet,” said Nordstrom.
Also, as part of its service strategy, the company uses a decentralized buying system. “We feel that the only person who knows what the customer wants is the person waiting on them, the salespeople,” said Nordstrom. “As a result, we are extremely decentralized. We want the people making the decisions to be close to the salespeople.”
Danielle Danna, Midwest contemporary buyer for Nordstrom’s “Savvy” department, said she keeps in touch by “spending Saturdays on the selling floor trying to find out what my customers want.”
She has observed that in Illinois there is particular demand for weekend wear, casual looks and specialty items. Customers, she said, range from the sophisticated DKNY-suited women to the funky Blue Fish dress wearer.
Woodfield is Nordstrom’s 78th store. Other Midwestern openings currently slated include Indianapolis in September; Troy, Michigan, in 1996, and Beachwood, Ohio, in 1997. There is also talk of the company seeking a site on Chicago’s Michigan Avenue.