For 104-year-old Nordstrom, 2004 was a year of firsts. The upscale retailer exceeded $7 billion in annual sales for the first time in its...
For 104-year-old Nordstrom, 2004 was a year of firsts.
The upscale retailer exceeded $7 billion in annual sales for the first time in its history. Put into perspective, it took the company 83 years to sell $1 billion worth of suits, purses and shoes in a year. In December, it did so in a month — another first.
“What’s most important about … the business of fashion is: ‘What’s it mean to sales?,’ ” President Blake Nordstrom told shareholders yesterday at the company’s annual meeting at its downtown Seattle headquarters.
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“Because sales are the truth, and it’s the number one way to measure how we’re doing as merchants.”
Blake Nordstrom, who assumed the helm in August 2000 after the company’s “Reinvent Yourself” campaign sputtered with shoppers, ticked off a list of recent company accomplishments to 350 shareholders:
• Its stock has climbed about 230 percent since the start of 2001.
• It has posted 24 months of consecutive same-store sales gains — a key retail gauge that measures sales for stores open at least a year.
• Its gross profit as a percentage of sales reached 36.1 percent, a company high and a sign of its success at chipping away at costs.
• Its board yesterday approved a 2-for-1 stock split, the first split in seven years and the seventh since Nordstrom debuted on the New York Stock Exchange in 1971.
Shareholders of record on June 13 will receive the additional shares on or about June 30, the company said.
Last week, the company increased its quarterly dividend by 31 percent to 17 cents a share.
Nordstrom’s turnaround — achieved in about five years — is partly attributed to its substantial investment in a computerized inventory system, which has given the company’s buyers and salespeople the data to make smarter decisions about what it sells.
If the company understands what apparel and accessories appeal to its customers, its technology identifies what colors, sizes and quantities to buy and keep in stock, enabling Nordstrom to sell more items at full price.
Inventory is “perishable,” Blake Nordstrom said. “If you’re buying the wrong stuff, you get markdowns.”
Nordstrom is known for its legendary customer service, and part of yesterday’s meeting included reading some of the letters the company received last year, including a particularly candid one from a woman in Atlanta.
The woman wrote to thank two employees: a woman who helped her pick out perfume and a man who saw her struggling with four bags and offered to carry them to her car.
“Well, I must say I was shocked because I didn’t think there were any more gentlemen left in Atlanta,” she wrote about the offer. “I was wrong.”
She then closed her letter by praising their “clean clean” restrooms, adding that an unnamed competitor’s “ladies rooms are like sewers. I never use them.”
“Never underestimate the power of a clean restroom,” said Erik Nordstrom, the company’s executive vice president of full-line stores, who read the letters.
In others news, Nordstrom yesterday agreed to give purchasing preference to suppliers who don’t use mulesing to collect wool from sheep. The practice, used in the Australian wool industry, involves removing the wool-bearing skin from the hindquarters of sheep.
The company met with the PETA (People for the Ethical Treatment of Animals), which has campaigned against mulesing and other practices surrounding Australia’s live-exports trade.
Nordstrom is a member of the Business for Social Responsibility group, a collection of retailers that have urged the wool industry to find other alternatives to mulesing.
“They purchase enough wool to make a difference,” said David Benjamin, special-products coordinator for PETA.
Nordstrom’s shares closed yesterday at $59.74, down 7 cents.
Monica Soto Ouchi: 206-515-5632 or firstname.lastname@example.org