Nordstrom Getting More from Less
By George Anderson
Nordstrom company officials, reports Women’s Wear Daily (WWD), are “getting more sales out of less inventory’ in large part because the company has invested in technology systems designed to help it do just that.
Pete Nordstrom, president for merchandising at the retailer, said, “We turn a lot faster now and we keep improving, though we have a long way to go.”
According to the WWD article, productivity at $369 a square foot last year was up from $347 in 2004. Those numbers place Nordstrom second in the department store segment only behind Neiman Marcus.
Arnold Aronson, managing director of retail strategies for Kurt Salmon Associates said, “Nordstrom is on a very good trajectory because it has combined traditional strengths — service and dominant assortments — with all of the necessities of 21st-century retailing爿etter technology; sophisticated logistics; centralized operations to economies of scale; moving into different channels of distribution, meaning Internet and specialty businesses, and greater participation in a market that’s really become the most profitable — luxury and aspiring luxury.”
Jennifer Black, president of Jennifer Black Associates, wrote in a research report earlier this month that Nordstrom is in demand as a mall anchor and that means “more attractive real estate offers” from mall developers and operators.
Nordstrom has already announced plans to aggressively pursue growth through new store expansion. The chain plans to add 15 new full-line stores while relocating four others by 2010.
Even more opportunities for expansion may be opened up depending on what Federated does with a number of its properties and its Lord & Taylor business.
“There is not a never-ending list of places we could go, but opportunities keep presenting themselves,” said Mr. Nordstrom “There will be a point where we have to look at a new
way to expand. We could decide to have a store in Canada. We could do a new format, but this is not an immediate issue.”
Moderator’s Comment: Will the luxury end of the retail market served by Nordstrom continue to remain strong in the face of economic uncertainties such
as high energy prices, rising interest rates and other factors? In what areas do you see room for Nordstrom to make its business even more productive? –
George Anderson – Moderator