Nordstrom Thrives On Feeding The Fashionistas

While many retailers have been singing the first-quarter blues, Nordstrom, Inc. said total sales in the first quarter were $1.95 billion, up 9.3% compared the same period in fiscal 2006. And same-store sales gained 9.5%, its 16th quarter of positive same-store sales gains -- results the Seattle-based retailer attributed to its renewed commitment to high-end fashion.

"We're focusing on fashion, brands, newness and quality," company executives said in a conference call, and are finding that Nordstrom customers are more motivated to buy what's new than what's on sale. Our customers want more access to designers, and more merchandise at the top of luxury sales," said Blake W. Nordstrom, president of Nordstrom. In stores where there is a greater designer presence, he added, it has "improved not just the sales of that one department, but the entire business of the store."

The company also said initial customer response to its enhanced Fashion Rewards programs, which offers perks like alterations and shipping to heavy-duty shoppers, has been extremely positive. "If we use this information correctly, there's some tremendous growth potential," he said.



Sales momentum in its online store continued to be strong, and the company said it is committed to building its multi-channel platforms to better serve the needs of all its customers.

Still, the company presented some somewhat subdued expectations for the full year, with same-store sales expected to gain 3% to 4%. And in the second quarter, it expects increases of just 1% to 2%.

In terms of expansion plans, execs said Nordstrom, which now has 98 full-line stores, is still on the prowl for a Manhattan location, and recently, it announced plans to open a new Nordstrom in Sarasota, Fla., in fall 2010. It also said it will add a new Nordstrom Rack store, its off-price retail division that offers savings of 30 to 75% on apparel, accessories and gifts, in Dallas. And Nordstrom will maintain the roughly two-to-one ratio of full-line-to-discount stores.

"We have a lot of confidence in our customers, across all categories and all regions," said Peter E. Nordstrom, president of merchandising, in the call. "They are responding to us delivering better and better products. They have a strong desire to buy the best products there are, and they want to buy them through Nordstrom."

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