The company will focus on making shopping more fun by remodeling stores and refining the merchandise, shareholders are told at the annual meeting on Tuesday.
When Nordstrom eyes the future, it’s centered on remodeling, relocating and building new full-line department stores across the country.
It seems fitting, then, that it laid out this vision at store No. 1.
The Seattle-based upscale retailer Tuesday held its annual shareholders meeting at its flagship store in downtown Seattle — its first with the fourth-generation Nordstroms specifically charged with the company’s fate. Chairman Bruce Nordstrom and longtime director John Nordstrom — the last of the third generation to run the company — both retired at last year’s annual meeting.
Nordstrom executives on Tuesday shared how the company has continued to reap the benefits of changes it made six years ago, amid slowing sales and profits.
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In August 2000, the company placed the fourth generation in key leadership roles after a “Reinvent Yourself” campaign sputtered with core shoppers.
Among its most significant changes, the company invested in a perpetual inventory system that helped buyers and salespeople make smarter decisions about what it sells.
Choosing items in the right styles, quantities and colors has enabled it to sell more of these items at full price.
When speaking of inventory, President Blake Nordstrom said his father, Bruce, has often used the analogy of a Pike Place Market farmer selling highly perishable fruit.”When you’re in the fashion business, and you get that lime-green jumpsuit, if you don’t sell it, it’s a markdown,” he said.
Managing inventory, among other improvements, helped Nordstrom post $8.6 billion in sales for the last fiscal year, a 10.8 percent increase from the year before. Its profit rose 23.0 percent to $678 million or $2.55 per share.
The company has also worked to narrow expenses, which reached a company high in 2000. The retailer’s overhead declined for the sixth year to 26.8 percent of sales. Its pre-tax profit also exceeded $1 billion for the first time. Blake Nordstrom said the company will focus on enhancing the customer experience in its full-line stores by remodeling existing stores and refining the merchandise it offers to customers.
The company plans to spend $100 million annually remodeling and relocating stores.
Nordstrom also plans to double the size of its Cedar Rapids, Iowa, distribution center to serve its burgeoning online business.
Nordstrom Direct, which includes its online division, posted more than $500 million in sales last fiscal year. The company forecasts sales to surpass $1 billion in the next few years.
For a company known for its customer service, perhaps the most amusing part of the annual meeting is the letters it reads from shoppers.
Erik Nordstrom, the company’s president of stores, read a letter from an unidentified fashion-challenged chief executive in Oregon, who commended a Nordstrom salesman named Jim for helping him select a wardrobe for some important functions in New York.
Jim helped him pick out jackets, shirts, trousers, jeans, shoes, a belt, a coat “and even underwear, socks and cologne.”
“After leaving the store, I even got a new haircut,” he wrote, continuing later in the letter, “I feel as if I was in one of those makeover programs.”
Also Tuesday, Nordstrom declared a quarterly dividend of 13.5 cents per share, payable June 15 to shareholders of record on May 31.
The company’s shares closed Tuesday at $52.05, down 65 cents.
Monica Soto Ouchi: 206-515-5632 or firstname.lastname@example.org