TheStreet.com  Nov 11  Comment 
NEW YORK (TheStreet) -- Holiday shoppers have already begun to prepare their gift lists and are thinking about where to shop. Some will shop online, while others will check websites, then go to the mall to shop just for the fun of it. Some even...
Benzinga  Nov 10  Comment 
Richard Jaffe previewed Softline retailers upcoming third quarter results in a note to clients on Monday. The analyst maintains a positive tone on Macy's, Inc. (NYSE: M), Kohl's Corporation (NYSE: KSS) and Nordstrom, Inc. (NYSE: JWN). Jaffe...
Market Intelligence Center  Nov 5  Comment 
After Tuesday’s trading in Nordstrom Inc. (JWN) MarketIntelligenceCenter.com's patented algorithms uncovered a trade that offers a 2.82% return or 14.10% on an annualized basis (for comparison purposes only), while providing 5.48% downside...
Benzinga  Nov 4  Comment 
Black Friday, the day after Thanksgiving, is the biggest shopping day of the year. Over the last few years, however, major stores have opened their doors earlier and earlier, with several stores open on Thanksgiving day itself. This phenomenon...
Benzinga  Nov 4  Comment 
In a report published Tuesday, Brean Capital analyst Tom Forte initiated coverage on Nordstrom, Inc. (NYSE: JWN) with a Hold rating. In the report, Brean Capital noted, “We are initiating coverage on Nordstrom (JWN) with a Hold rating....
Market Intelligence Center  Nov 3  Comment 
Nordstrom Inc. (JWN) was selected by MarketIntelligenceCenter.com’s trade-picking algorithms today after trading between $72.29 and $73.74 on Friday before closing at $72.61. A diagonal spread using a long position in the Jan. '16 $50.00 call...
Benzinga  Oct 22  Comment 
Regulus Therapeutics (NASDAQ: RGLS) shares jumped 85.97% to reach a new 52-week high of $12.59 following the announcement of positive RG-101 study data. Jack in the Box (NASDAQ: JACK) shares rose 1.16% to touch a new 52-week high of $69.89....
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...


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.


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.


  1. JWN 2010 10-K pg. 16
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