NORDSTROM REPORT: 2009 ABOUT: Nordstrom is the name of the company. The corporate office is located in Seattle, Washington. Nordstrom is one of the nation’s largest upscale apparel and shoe retailers (Biesada 2009). Nordstrom sells clothing, footwear, and accessories. There are one hundred and ten Nordstrom stores, and sixty outlet stores, such as Nordstrom Rack. Nordstrom is located in more than twenty-‐five states. Nordstrom also vends goods online and in catalogs. Nordstrom is also notoriously known for it’s top customer service, such as an easy return policy and nice gestures such as thank-‐you cards from the employees. (Biesada 2009). The members of the Nordstrom family oversee the company and even own more than fifteen percent of Nordstrom’s stock. The fiscal year of annual report is 2008. 2008 Sales
2007 Sales
%Sales 2008 Net
2007 Net
%
Change Income
Income
Change Net Income
$8,573,000,000 $8,828,000,000 -‐3%
$4,010,000,000 7,150,000,000 -‐44%
REPORT: Nordstrom was ranked as number forty-‐six on the “Top 100 Retailers” article. The top retailer, Wal-‐Mart, had their 2008 sales as $405,607,000,000.00. Nordstrom’s 2008 sales, as shown in the chart above, are $8,573,000,000.00, meaning that Nordstrom is $397,034,000,000.00 dollars below Wal-‐Mart, the top retailer. In 2007, Nordstrom was ranked as number thirty-‐nine. This means that
Nordstrom’s ranking has decreased seven spots on the Top 100 list. Nordstrom has been affected by the economy as shown by their decrease in sales from last year to this year. (Shultz 2009). According to Nordstrom’s website, their volume amounts to $3,502,806. The sales release for September will not be issued to the public until October 8, thus the sales report for August is used. Nordstrom compared the four-‐week period ended on August 29, 2009 with the four-‐week period ended on August 30, 2008, and found that in their same-‐store sales, there was a 7.6% decrease. The preliminary total retail sales of $541,000,000 for August 2009 compared to $558,000,000 for the same period in fiscal 2008, showed a decrease of 3.0 percent. Nordstrom also conveyed that their year-‐to-‐date same-‐store sales decreased 10.9 percent compared with the same period in fiscal 2008. Its preliminary year-‐to-‐date total retail sales of $4,390,000,000 decreased by 7.0 percent compared with total retail sales of $4,720,000,000 for the same period in fiscal 2008. (Nordstrom Inc. 2009). This means that, like many other retailers in the industry, Nordstrom is suffering. Nordstrom’s decrease in sales is due to the effects of reduced consumer spending. This was especially noticeable during the second half of 2008. As a result, Nordstrom is cutting back by reducing its expenses in 2009 by downgrading in the number of stores in remodels and postponing or cancelling plans for several new Nordstrom department stores. However, there are plans to open three new Nordstrom stores, as well as ten Nordstrom Rack stores during the year of 2009. (Biesada 2009). Before this plan, there was another plan to open thirty new or relocated Nordstrom department stores and to remodel thirty others each year over
the course of five years. However, the plan was cancelled because of the downfall economy. Currently, there are one-‐hundred-‐and-‐nine full-‐line stores and sixty-‐two Nordstrom Rack stores divided into twenty-‐eight different states all areas of the United States. Though hesitant, Nordstrom hopes to open nearly fifty stores in the next ten years, and has already made their plan to open twenty-‐six new stores in 2012 public. Some of the new stores will be located in major American cities, as well as in San Juan, Puerto Rico. (Biesada 2009). Nordstrom covets multiple strengths. Their top strength as a company is that their customer service is the best. Nordstrom believes that everything is for the customer and the customer is always right. Thus, a customer can return anything previously purchased at Nordstrom from one hour later to many years later, without a receipt, and without question from Nordstrom’s employees. Customers appreciate Nordstrom’s return policy, and they take it into consideration when they shop at Nordstrom. (Biesada 2009). Another strength is that the company reviews its plans constantly to make sure that the plans will help the company no matter what. As seen in the previous question, Nordstrom had a plan, but with careful deliberation, it realized that a different plan might be more sufficient for the company. Thus, once Nordstrom makes its decisions, it reviews the decisions made, and then decides if it should be implemented, or replaced with an even better strategy. As stated in the above answer, Nordstrom hopes to open fifty stores in the next ten years, twenty-‐six stores in the year 2012, and three new stores and ten Nordstrom Rack stores during 2009. Nordstrom sees potential for growth in all areas of the country, but mostly in major cities, such as Phoenix, Nashville, and St.
Louis. To develop business, Nordstrom has a strategy comprising of four key aspects. The first point is to improve the customer service experience. The second aspect is to continue to develop its merchandise so that it is constantly meeting the challenging needs of the customers. The third feature is to deepen the personal bonds with the customers through its multi-‐channel shopping experience and through Nordstrom’s Fashion Rewards program. Finally, the last point in the strategy is to manage the business effectively through an unpredictable environment and to emerge stronger. (Nordstrom Inc. 2009). The first article, from Women’s Wear Daily, discusses how Jimmy Choo shoes will be available at Nordstrom, starting in January 2010. There will be 28 different styles offered. This could potentially improve Nordstrom’s business. Jimmy Choo is a well-‐ respected designer, who “has been upping the fashion quotient over the past few years”. (Conti 2009). Tamara Mellon, the CEO and founder of Jimmy Choo, believes the shoes, though expensive, are a strong investment because the shoes are timeless. She also claims that it is a wardrobe necessity for every woman. The new Jimmy Choo collection consists of many styles, ranging from flats, to heels, to boots. There are also a variety of colors, such as black, champagne glitter, leopard print, and metallic. Nordstrom and Jimmy Choo both view this plan as a good opportunity for business. (Conti 2009). Hopefully, the Jimmy Choo collection will attract consumers to Nordstrom, and therefore increasing sales. The second article, from Entertainment Newsweekly, discusses how Nordstrom has teamed up with Summit Entertainment, a worldwide theatrical motion picture studio, to produce an exclusive line of fashion and jewelry based off of the hit book
and movie series, Twilight. The Twilight merchandise has already been available on Nordstrom’s website since October 1, 2009. However, the anticipated apparel and jewelry will not be available in Nordstrom stores until October 15, 2009. The merchandise will include “t-‐shirts, tanks, and hoodies that reflect the mood and spirit of the film”. (Bailey 2009). In terms of jewelry, the collection consists of silver and gold plated bracelets, necklaces, earrings, and key fobs. (Bailey 2009). Nordstrom believes that this opportunity will enable the millions of Twilight fans to show their love towards it by sporting the Twilight merchandise and even pairing it with other articles of clothing from Nordstrom to create their own look. (Bailey 2009). Nordstrom is not only selling Twilight-‐inspired products, but it is also creating excitement among the customers by hosting different events to celebrate the second movie of the Twilight series, such as advanced screening parties. This is relevant to Nordstrom’s business because the hope is that fans of Twilight will be attracted to the inspired clothing and jewelry. Nordstrom believes that the events will help market the new merchandise, which, if popular, will spark increased sales for Nordstrom and its business. I am impressed with Nordstrom’s positive attitude towards increasing their sales, despite their recent decrease in sales as a result of the economy. I believe that because Nordstrom has taken on a new strategy with an optimistic outlook, they will succeed. I also believe that their new Twilight line will help them amplify their earnings. As a dedicated Nordstrom customer, I hope that through its hard work and new, creative ideas, it will fulfill its wish to climb the Top 100 Retail ladder even further than before. I have learned about the background of Nordstrom, such as the
large amount of its family involvement in the company, and also when it was founded. I also admire the fact that although Nordstrom is already known for its excellent customer service and return policy, it is trying to work harder to improve it even more. Nordstrom does not start to slow down its efforts, even after to be proven successful. Instead, the company does more research to improve even more. Nordstrom never stops striving to impress its customers, shareholders, and ultimately reach its goal.
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