Nordstrom is to shoes what Amazon.com is to books. But what of denim and suits? The upscale retailer in the past year has sought to re-energize...
Nordstrom is to shoes what Amazon.com is to books.
But what of denim and suits?
The upscale retailer in the past year has sought to re-energize its overall women’s apparel business, to gain the attention of customers who already buy shoes, accessories and cosmetics from its stores.
To that end, Nordstrom has worked to more sharply define its women’s apparel departments — stores within a store, so to speak — to help create deeper relationships with customers.
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“As we learn more about our customer, we know as loyal and supportive as some of these customers are, they still spend a great deal with other retailers,” President Blake Nordstrom told analysts Monday during the retailer’s quarterly conference call.
Nordstrom reported strong sales for the critical holiday quarter, but its profit was a penny shy of analysts’ estimates.
The Seattle company posted a fourth-quarter profit of $232.3 million, or 89 cents a share, up 22.0 percent from a year ago. Sales rose 14.6 percent to $2.6 billion.
Analysts polled by Thomson Financial had forecast a profit of 90 cents a share on sales of $2.6 billion. The slight miss sent Nordstrom stock tumbling in after-hours trading.
Patricia Edwards, a retail analyst with Wentworth, Hauser and Violich in Seattle, said the retailer has done a better job letting customers understand each women’s apparel department.
She remembers walking through a store a year ago with someone who wondered how they’d know where to shop.
“They’ve clearly delineated that,” Edwards said. “If I look at [departments] Narrative versus Point of View, it’s pretty apparent to me within 30 seconds where I should be shopping based on price point, occasion and style.”
The company has, for example, removed some career wear from its T.b.d. department, known contemporary fashion featuring premium denim and brands such as Free People and Juicy Couture.
Likewise, Nordstrom has increased its wear-to-work and work separates pieces in the modern-careerwear department, Individualist, which sell at prices a step down from designer apparel.
Pete Nordstrom, president of merchandising, told analysts the management team is halfway through its implementation. “These are strategies that we’re going to continue to update over time,” he said.
The team is credited with engineering a remarkable turnaround, partly by investing heavily in a computerized inventory system that gave buyers and salespeople the data to make smarter decisions about what to sell.
Selecting handbags and designer jeans in the right styles, quantities and colors has enabled the retailer to sell more items at full price.
Nordstrom’s quarterly same-store sales — a key gauge that measures performance for stores open a year or more — rose 8.3 percent, marking the fifth consecutive year of positive same-store sales growth.
The retailer reported a full-year profit of $678.0 million, or $2.55 a share, on sales of $8.6 billion.
Nordstrom plans to open three full-line stores this year in Massachusetts, Michigan and Colorado, and a Nordstrom Rack this fall at Southcenter Square in Tukwila.
The company forecast a first-quarter profit in the range of 51 to 54 cents.
Nordstrom’s shares closed at $56.60, down $1.48, and fell an additional $2.00 in after-hours trading. The company announced its financial results after the markets closed.
In the last year, the stock has traded between $59.70 and $31.77.
Monica Soto Ouchi: 206-515-5632 or email@example.com