Roulston Retail Partner Maggie Gilliam on Nordstrom’s Growth

September 27, 2012

Anyone who doubted that Nordstrom wasn’t experiencing good business, at the time of the company’s July sales release, had to have been more than reassured with the August report. In July, total comparable sales increased 1.3%, for the full-line stores and 9.7% for Nordstrom Rack. The explanation for the soft full-line comparison was that the company’s major annual promotional event, its Anniversary Sale, shifted out a week this year, so that the second week was in August, rather than in July as was the case in 2011. August sales came in with a 24.0% full-line increase and with 7.1% in the Rack. And the increase was sufficient to lift year-to-date comparable full-line store sales to 8.6%, from 6.8% in the first half, or to get back on trend prior to the July distortion.

Although much of the credit of the Nordstrom superior performance is due to the company’s integration of its full-line stores with Nordstrom Direct, so as to enable superior customer service and to enhance the productivity of both individual sales associates and stores, the company has announced two new stores, to open in the fall of 2014. One will be 138,000 sq. ft. in General Growth Properties’ The Woodlands Mall in The Woodlands, TX, north of Houston, and the other, a 124,000 sq. ft. unit, in St. Johns Town Center in Jacksonville, FL. St. Johns is owned and co-developed by Simon Property Group and Ben Carter Properties. The two stores should foster penetration in these markets. Jacksonville is a new market, but Nordstrom enjoys online acceptance there, and in the Houston area, the company’s only other full-line store is far removed in the Galleria. The move signifies more growth as omnichannel shoppers spend more money than either exclusively direct or full-line shoppers. And accordingly, we are delighted to see the company undertake this expansion.

 

Gilliam & Co. is an independent research and advisory firm, specializing in retailing and related fields, and providing consulting and advisory services for both businesses and investors. The company publishes the Gilliam Viewpoint®, a monthly synopsis of current topics, with particular attention towards their longer-term significance, and intended to be an extension of Wall Street Research. This publication is supplemented with timely updates for subscribers on our Website. This article is taken from September’s issue of the Viewpoint and if you are interested in subscribing please visit http://gilliamco.com/?page_id=183.

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