April 9, 2009
Nordstrom Doing More With Less
FROM RETAILWIRE:
Nordstrom is all about inventory reduction. Okay, maybe not all, but as a Bloomberg report points out, the company has made a concentrated effort going back to 2000 to reduce its inventory levels. Is inventory management a greater piece of the success puzzle now than it has been in the past?
MY COMMENTARY:
Particularly in the context of American retail, Nordstrom's ability to manage down its inventory levels over the years is impressive. It starts with the Nordstrom senior management's focus on inventory control as a driver of profit growth via lower inventory carrying costs and avoiding restrictive credit covenants. With great systems, combined with an unusually talented buying and product sourcing group, Nordstrom continues to increase sales with less inventory. Most department stores lack the focus and the tools to manage inventory effectively. Plus, many "bought" gross margin by agreeing to ever-growing buy commitments from suppliers in exchange for season-saving margin checks. The result is an ever-growing hangover of unsaleable merchandise sitting in stores and clearance outlets. This is one of the reasons others have succumbed bankruptcies and liquidation. Nordstrom has the right formula and it can be learned and implemented elsewhere.
![[RSS Feed]](/images/rss_btn.gif)
