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Aug 19 - Nordstrom Did So Much Right, but It’s Still in Trouble


 


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 1 month ago '04        #1
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mr_underground|m  2241 heat pts2241
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Aug 19 - Nordstrom Did So Much Right, but It’s Still in Trouble
 

 
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Nordstrom Inc. JWN 3.08% invested heavily in e-commerce, didn’t open too many cavernous stores and has been quick to experiment with new types of shopping formats, including stores that don’t carry any clothes.

Yet, it’s suffering the same fate as department stores that innovated less, with year-over-year sales and profits expected to fall for the second consecutive quarter when it reports results on Wednesday. Its stock is the second-worst performing in the S&P 500 retail index behind shares of Macy’s Inc., falling 52% over the past 12 months through Friday’s close. During that period, the index was roughly flat.

Its performance has led some directors to push for bringing in an outsider to replace the two great-grandsons of the founder who run the company, as The Wall Street Journal previously reported. Unwilling to relinquish stewardship of the 118-year-old retailer, the family is considering a proposal that would boost its roughly one-third stake to over 50%, though it isn’t yet clear if the board will be receptive.

Also unclear is whether a fresh set of eyes would solve Nordstrom’s woes. Some of its problems stem from the fact that it operates department stores in malls where fewer people are shopping as they buy more online and from upstart brands. Other department stores, including Macy’s and J.C. Penney Co. , are suffering too.

Nordstrom has had only one nonfamily CEO since it was founded in 1901. John Whitacre spent two decades working his way up the company ranks before he was named CEO in 1997. He resigned in 2000 following poor results.

“John had the clear support of the family and yet it was still a challenging dynamic,” said Kathy Gersch, who was Nordstrom’s vice president of finance during that time.

Nordstrom doesn’t currently have a CEO. It is run jointly by Pete and Erik Nordstrom, who share the title of co-president. A third brother, Blake, who was also a co-president, died unexpectedly in January, after disclosing he had been diagnosed with cancer.

Pete focuses on merchandising and the off-price Rack division. Erik concentrates on the full priced stores and e-commerce. They divvy up corporate functions such as human resources, marketing and technology. Blake had handled more of the traditional CEO duties such as communicating with Wall Street.

The brothers make all major decisions together, often hashing out issues in a Monday morning meeting so that they present a unified front when they sit down with the executive team later that day, said former and current employees.

Such management by consensus may not be ideal in a world that is changing rapidly, but it’s an improvement over the six Nordstrom family members who held the co-president title in the late 1990s, a setup that Ms. Gersch, who is now an industry consultant at Kotter, called “insane.”

The family’s enduring presence created the cult of customer service that endeared Nordstrom to generations of shoppers, former employees said. But it also bred insularity. In meetings internally and with suppliers, executives can be polite to a fault, unwilling to make tough decisions or push for a better deal, the people said.

“There is a saying inside the company, ‘Nordstrom Nice,’” Pete Nordstrom said in a 2017 interview. “Sometimes I worry that we’re too nice. We have to be super accommodating with customers, but we also have to pivot and be sharp businesspeople who negotiate in the best interest of our business.”

Nordstrom’s recent stumbles have left some analysts puzzled.

“It’s an enigma why their business isn’t better,” said Chuck Grom, a senior analyst with Gordon Haskett Research Advisors. “They have one of the best websites. They don’t have too many stores.”

Nordstrom took pains to avoid some of the mistakes that other department stores made.

It didn’t over-expand and today has just 118 U.S. department stores, and 248 off-price Rack stores. While Macy’s, J.C. Penney and other chains have been closing hundreds of locations, Nordstrom continues to build stores, including its first Manhattan flagship scheduled to open in October.

Although slow to jump into e-commerce—only about 6% of its sales were digital a decade ago, according to a former employee—Nordstrom moved aggressively.

It bought the flash-sale website HauteLook in 2011, and Trunk Club, an online clothing subscription service, in 2014. It rolled out new services that melded e-commerce and physical stores, such as same-day shipping for online orders that pulled items from local stores in select markets. And it changed its compensation to reward employees not just for sales they make at a store, but also for online sales in the surrounding market.

In 2013, before many retailers fully understood the threat of Amazon.com Inc. and other digital newcomers, Nordstrom posted signs in its corporate offices that urged employees to think like a startup. It poached dozens of employees from Amazon, whose Seattle headquarters is six blocks away from Nordstrom’s.

Today, e-commerce accounts for nearly a third of the company’s $15.9 billion in annual sales, far higher than most of its rivals.

The investments haven’t always paid off. In 2016, Nordstrom wrote down the value of Trunk Club by more than half of the $350 million purchase price. From 2013 through 2018, earnings before interest and taxes fell 38%, while revenue climbed by nearly a third.

“On the surface, the investments appeared to be smart,” said Paul Lejuez, a Citi analyst. “But the numbers don’t make anyone feel good about how they’ve spent their money.”

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 1 month ago '04        #2
virusrev 
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Baffling Nordstrom isn’t doing better. Great website, rewards, and customer service.
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 1 month ago '19        #3
16z 
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Imo high quality sh*t you may never heard of with a price that make you say fu*k this sh*t. Get some better brands in that bi*ch they’ll bounce back in no time, find out what cities don’t have access to certain designers and boom
+29   

 1 month ago '15        #4
isthistobe  473 heat pts473
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Nordys got some heat online
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 1 month ago '18        #5
No Religion  25 heat pts25
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Tl;dr
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 1 month ago '18        #6
Jwardisback3rd 
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I love Nordstrom’s. I get maybe 80 percent of my clothes from there. Rewards are great, always have the huge yearly sell, employees are nice and helpful. Also the returns are great. They have there own little help desk for returns, they’ll hem your pants for free too
Use to only shop at Macy’s but they fell the fu*k off it’s crazy, stumbled in once to buy a warriors jersey, that was locked up. No one had a key so me being stubborn pulled the lock and made the alarm go off thinking someone would rush over and unlock it and turn the sound off, Still nothing..... anyways hope Nordstrom pulls through


Last edited by Jwardisback3rd; 08-20-2019 at 10:10 AM..
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 1 month ago '05        #7
hbk83  1 heat pts1
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Man just look at target and Walmart sales. People are wearing basic clothes. I buy plain shirts from target and wear that sh*t all summer. And plain long sleeves all winter. Fashion has dimmed a bit, nobody really cares what you wear anymore. People are saving money buying cheap as possible.
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 1 month ago '14        #8
Bigboi781  30 heat pts30
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 hbk83 said
Man just look at target and Walmart sales. People are wearing basic clothes. I buy plain shirts from target and wear that sh*t all summer. And plain long sleeves all winter. Fashion has dimmed a bit, nobody really cares what you wear anymore. People are saving money buying cheap as possible.
Facts, Primark literally sells jeans for 10 bucks. And they last for like a year or 2 which isn’t bad for the price.
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 1 month ago '15        #9
donnyyy  17 heat pts17
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Prices are too high

I think theyre making the same mistake other companies like Kmart, Sears, and Toys R Us did with that.
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 1 month ago '16        #10
00010111  139 heat pts139
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 16z said
Imo high quality sh*t you may never heard of with a price that make you say fu*k this sh*t. Get some better brands in that bi*ch they’ll bounce back in no time, find out what cities don’t have access to certain designers and boom
When you say 'better brands'?

What do you mean?

Better known or better quality? Because they already sell good quality items.
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 1 month ago '15        #11
Hellmatic  3 heat pts3
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But bx said if you move with the times and put your focus on the online end of things youll be good
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 1 month ago '10        #12
ARosary  53 heat pts53
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It's because A LOT of these companies are offering brands nobody will buy or want to go to buy in store


No reason ANY god damn store should have Southpole or USPA to add on too
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 1 month ago '10        #13
ARosary  53 heat pts53
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 00010111 said
When you say 'better brands'?

What do you mean?

Better known or better quality? Because they already sell good quality items.
I concur with him

I think they should introduce more brands & or offer more limited brands that are reasonable in cost
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 1 month ago '16        #14
00010111  139 heat pts139
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 ARosary said
I concur with him

I think they should introduce more brands & or offer more limited brands that are reasonable in cost
One of the things that I like about Nordstrom is that they stock brands and items that I won't find in the majority of other stores.
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 1 month ago '05        #15
THEINFAMOUS  21 heat pts21
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Any time I go in Nordstrom it’s packed
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 1 month ago '05        #16
Sluggernaut  26 heat pts26
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fashion nova have men clothes now

and they got stupid deals and free delivery

i walk into Nordstrom, they got some nice sh*t, especially Winter time, the North Face jackets be off the hook except it costs about $300

i go to Kohl’s or something similar and spend $80
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 1 month ago '10        #17
Kool Aid  13 heat pts13
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They should probably put security tags on their apparel so they aren't so easy to steal
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 1 month ago '19        #18
Gold Face  7 heat pts7
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Gold face is shorting brick and mortars to the ground

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 1 month ago '05        #19
ayoking  6 heat pts6
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 Bigboi781 said
Facts, Primark literally sells jeans for 10 bucks. And they last for like a year or 2 which isn’t bad for the price.
Primark is everything

 1 month ago '12        #20
FrescoB  85 heat pts85
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Bought some jeans from Forman Mills, cut them bi*ches at the knee and I got a sweet pair or jean shorts.

Its the man that makes the clothing
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 1 month ago '19        #21
16z 
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 00010111 said
When you say 'better brands'?

What do you mean?

Better known or better quality? Because they already sell good quality items.
Better known

 1 month ago '14        #22
titans7  3 heat pts3
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They got some free advertisement on American Dad last night.


[spoiler - click to view]

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 1 month ago '14        #23
black cobra  895 heat pts895
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-4   

 1 month ago '17        #24
R Shackleford 
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 black cobra said



@ gif

 1 month ago '16        #25
00010111  139 heat pts139
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 Jwardisback3rd said
I love Nordstrom’s. I get maybe 80 percent of my clothes from there. Rewards are great, always have the huge yearly sell, employees are nice and helpful.
Use to only shop at Macy’s but they fell the fu*k off it’s crazy, stumbled in once to buy a warriors jersey, that was locked up. No one had a key so me being stubborn pulled the lock and made the alarm go off thinking someone would rush over and unlock it and turn the sound off, Still nothing..... anyways hope Nordstrom pulls through
Used to be me. But dude below has it right in 2019:

 hbk83 said
Man just look at target and Walmart sales. People are wearing basic clothes. I buy plain shirts from target and wear that sh*t all summer. And plain long sleeves all winter. Fashion has dimmed a bit, nobody really cares what you wear anymore. People are saving money buying cheap as possible.


 Sluggernaut said
fashion nova have men clothes now
LOL. No way.

I can't envisage ordering some fashionova sh*t. These instagram thots really fu*ked up their image.


Last edited by 00010111; 08-20-2019 at 06:41 AM..
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