QUOTE AND NEWS
Market Intelligence Center  Oct 20  Comment 
MarketIntelligenceCenter.com's patented algorithms have selected a trade on Nordstrom Inc. (JWN) that returns 10.06% in 89 days for an annualized return rate of 41%. This diagonal spread pairs a short position in the Jan. '15 $67.50 call, with a...
TheStreet.com  Oct 17  Comment 
NEW YORK (TheStreet) -- When you think of an e-commerce powerhouse, you probably wouldn't guess a 113-year old retailer is at the forefront. But that's exactly wherealuxury retail chain Nordstrom is. Founded in 1901 as a simple shoe store,...
Benzinga  Oct 16  Comment 
Nordstrom, Inc. (NYSE: JWN) could face higher-than expected costs to integrate its recent $350 million acquisition of the menswear retailer Trunk Club even as its expansion of discount Rack outlets cuts into profit margins, an analyst said...
TheStreet.com  Oct 16  Comment 
NEW YORK (TheStreet) -- Nordstrom shares are down 1.28% to $67.64 on Thursday after analysts at Macquarie downgraded the stock to "neutral" from "outperform" while also lowering its price target to $70 from $77. The firm isaconcerned about...
Clusterstock  Oct 14  Comment 
Matching shoes to the appropriate pants can be tricky.  An amateur men's-fashion enthusiast made a helpful guide to choosing appropriate footwear.  The guide was first posted to Reddit. The designer, who preferred to remain anonymous, was...
Benzinga  Oct 10  Comment 
Leading fashion specialty retailer Nordstrom, Inc. (NYSE: JWN) opened the doors to its first store in Northeast Florida today, located at St. Johns Town Center in Jacksonville. The two-level, 124,000 square-foot store features the latest interior...
Clusterstock  Oct 8  Comment 
Nordstrom is outperforming every other retail company.   The company's shares have gained 110% in five years. The company is well-positioned to continue that success in the future, according to a recent report by Deutsche Bank.  The...
New York Times  Sep 22  Comment 
Plans for the Nordstrom Tower have been adjusted so that it will jut out over the 1892 Art Students League building.
SeekingAlpha  Sep 15  Comment 
By Chronic Bull: Nordstrom, Inc. (NYSE:JWN) is one of the leading fashion specialty retailers serving the industry since 1901, when its sole product was shoes only. The company now offers footwear, clothing, jewelry, cosmetics and other...




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Nordstrom (NYSE: JWN) sells apparel, shoes, cosmetics and accessories to customers who are typically between 25-54 years of age and generate a household income in excess of $100,000. The company positions itself as an "affordable luxury" retailer that operates all of its 100+ Nordstrom full-line department stores in the U.S. exclusively. The company also operates 70+ off-price Nordstrom Rack stores.

Near-luxury and discount retailers, like Nordstrom, are vulnerable to slowdowns in consumer spending on such merchandise, which typically exaggerates the peaks and valleys of the overall economy.

Company Overview

Based in Seattle, Washington, Nordstrom has developed its own niche in the retail industry as an "affordable luxury" retailer, positioned between mid-tier retailers such as the Macy's Inc. (M) stores and high-end, luxury retailers, including Saks Fifth Avenue and privately-held Neiman Marcus. The company sells high-quality apparel, shoes, cosmetics and accessories, targeting customers between 25-54 years of age with an average household income of $100,000.

Business Segments

The company operates through two principle branches:

Retail Stores, Direct, and Other (96% of net sales)

  • Retail Stores: Nordstrom primarily gets its revenues from sales of high-quality shoes, cosmetics and accessories. The company's stores sell merchandise in seven different categories:
  1. Women's Apparel: 34% of net sales
  2. Shoes: 22% of net sales
  3. Men's Apparel: 15% of net sales
  4. Women's Accessories: 12% of net sales
  5. Cosmetics: 11% of net sales
  6. Children's Apparel: 3% of net sales
  7. Other: 3% of net sales
  • Direct: Nordstrom also sells its merchandise through its e-commerce website Nordstrom.com and catalogs.
  • Other: This segment involves the product development and design team, Nordstrom Product Group and corporate center operations

Credit (4% of net sales)

  • Credit: In owning its own federal savings bank, Nordstrom offers a private label card, two co-branded Nordstrom VISA credit cards and a debit card for Nordstrom purchases. These give rise to a shopping-based loyalty program designed to create incentives for increased customer consumption.

Business Growth

FY 2010 (ended January 30, 2011)[1]

  • Net sales increased 12.7% to $9.3 billion.
  • Net income increased 39% to $441 million.

Trends and Forces

Near-Luxury Retailers Suffer in Sluggish Economy

Near-luxury retailers, like Nordstrom or even Abercrombie & Fitch, that depend on aspiring middle class customers -- customers that are affected by recessions and cut back on spending -- are the ones that suffer through tough economic times. As these consumers cut back on spending, Nordstrom feels the pinch on its bottom line.

Innovate Online Tools Allow Nordstrom To Gain Competitive Advantage In Rebounding Economy

New technology, such as RFID chips, has allowed companies to better manage their stores. Using this technology, Nordstrom has developed a way to better manage its inventory and to better serve its customers. Customers that go to the store's website are able to see what items are available at a specific store location, as well as items that are available in the company's warehouses. This system has made it much easier for customers to shop online, and has even allowed customers to find items online and then request to try them on at stores. The change in inventory management has allowed Nordstrom to better serve its customers, which has translated into higher sales.

Competition

Nordstrom's competitors in the mid-tier department store industry include Macy's Inc. (M), Dillard's (DDS) and J.C. Penney (JCP). These companies provide near-luxury full-price items but also have discount stores as well. Mid-tier department stores are the most affected by the economic downturn because they rely on aspiring middle income consumers to generate revenue-- middle income consumers typically cut back spending and look for discounts as a way to save money during tough economic times.

Nordstrom also competes with companies in the luxury retail industry which include Saks Fifth Avenue (SKS) and companies in the discount retail industry like Kohl's (KSS). Nordstrom occupies a positioning between discount and luxury department stores in terms of the price it sells its merchandise at.

References

  1. JWN 2010 10-K pg. 16
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