Staggered by tough financial results over the past nine months, the company is attempting to bolster its bottom line by reducing expenses while getting more customers to shop and spend more.
Nordstrom is halfway to its planned 400 corporate job cuts, the company said at its annual shareholders’ meeting Thursday morning.
It also launched an expanded rewards program Thursday that allows customers without a Nordstrom card to earn points toward rewards.
Those two moves — one designed to cut expenses and the other to get more customers to visit stores more often and to spend more — are among the steps Nordstrom is taking to try to bolster its bottom line after a bruising nine months.
Last year was “a story of two halves,” Blake Nordstrom, company co-president, said at the meeting held at the downtown Seattle Nordstrom store. “The first half of the year, we were rockin’ along,” with sales in stores open at least a year up more than 4 percent.
Most Read Stories
- Seattle’s income tax on the wealthy is illegal, judge rules
- Retired Alabama cop on Roy Moore: ‘We were also told to ... make sure that he didn’t hang around the cheerleaders’ | National politics
- A Washington syrah was named second best wine in the world
- Expect record-high temps, 'copious rain' in Seattle area as we head toward Thanksgiving VIEW
- Fake field goal? An errant challenge? Blame Pete Carroll for Seahawks' loss to Atlanta
Nordstrom’s most recent quarterly results showed that overall company comparable sales — sales at stores open at least a year, including its online platforms — declined 1.7 percent. (Sales at its full-line stores fell even more sharply — by 7.7 percent.)
“It was the first decrease in the company since the third quarter of 2009,” Blake Nordstrom said.
A shareholder at the Nordstrom meeting asked what the company was doing to turn around its stock price, which has plunged from $74.47 at close a year ago to $37.12 at close Thursday.
Among the measures the company is taking is eliminating an anticipated 400 positions, the majority from its corporate headquarters in Seattle.
“At this juncture, we’ve got about half of that,” Blake Nordstrom said of the job cuts, which are expected to save the company $60 million. In total, the company is looking to cut $150 million in expenses.
It’s also working to reduce its $4 billion five-year capital plan.
Co-President Erik Nordstrom said the way customers are shopping is changing, with 20 percent of the company’s sales coming from its online platform, up from 8 percent about five years ago.
“I wouldn’t be surprised if it’s 30 percent in 10 years,” he said.
Fast page-load times and other factors that contribute to being a great e-commerce site are things that “Amazon does well. We’ve got to be at that standard,” he said.
But Nordstrom’s customers are not only online or only at brick-and-mortar stores, he added, citing as an example that more than 60 percent of the company’s online returns are done in the store.
Customers would “rather walk into a store and hand us the stuff than box it up and wait for UPS to pick it up,” he said.
There are “things we can do to leverage our physical assets,” he said.
The company on Thursday also offered more details of its previously announced expansion of its rewards program.
The program, previously available only to those with a Nordstrom card, is now open to customers no matter how they pay.
Those without a Nordstrom card earn one point per dollar spent.
Those with a Nordstrom credit or debit card earn two points per dollar spent.
And other benefits, including early access to the Anniversary Sale and private holiday shopping parties, remain for cardholders only.
Once customers accumulate 2,000 points, they get a $20 Nordstrom Note to spend on anything at Nordstrom stores.
The company hopes to add 5 million customers to the loyalty program in the next 12 months, saying that program members spend four times as much, and make three times as many trips, as nonmembers.
The company currently has 4.7 million members in its rewards program, with their purchases representing 38 percent of sales, according to Nordstrom’s first-quarter earnings results.