Nordstrom, Inc. operates as a fashion retailer.
The company offers an extensive selection of high-quality brand-name and private-label merchandise for women, men, young adults and children, with a focus on apparel, shoes, beauty, accessories and home goods.
Segments
The company has one reportable segment, which aggregates the company's two operating segments, Nordstrom and Nordstrom Rack.
Nordstrom
Nordstrom is a leading destination for a breadth of products across brands, styles and prices...
Nordstrom, Inc. operates as a fashion retailer.
The company offers an extensive selection of high-quality brand-name and private-label merchandise for women, men, young adults and children, with a focus on apparel, shoes, beauty, accessories and home goods.
Segments
The company has one reportable segment, which aggregates the company's two operating segments, Nordstrom and Nordstrom Rack.
Nordstrom
Nordstrom is a leading destination for a breadth of products across brands, styles and prices complemented by unmatched services and experiences. As of February 3, 2024, Nordstrom included the following physical and digital properties: various Nordstrom stores in the U.S.; Nordstrom.com website and mobile application; and various Nordstrom Locals. On March 2, 2023, Nordstrom Canada (Nordstrom Canada Retail, Inc., Nordstrom Canada Holdings, LLC and Nordstrom Canada Holdings II, LLC) commenced a wind-down of its business operations.
Nordstrom Rack
Nordstrom Rack is a premier off-price destination with an industry-leading off-price digital presence, offering great brands at great prices. As of February 3, 2024, Nordstrom Rack includes the following physical and digital properties: various Nordstrom Rack stores in the U.S.; NordstromRack.com website and mobile application; and various Last Chance clearance stores.
Nordstrom Rack purchases merchandise from many of the same vendors carried at Nordstrom and also serves as an outlet for clearance merchandise from the Nordstrom banner. The company continues to expand its offerings of the most coveted brands the company carries to ensure the company has an assortment that customers want. The company's intention is for customers to shop and discover amazing deals through both a selection of merchandise and limited-time flash sale events. The company continues to expand Nordstrom Rack's physical footprint - the company opened various new Nordstrom Rack stores across the U.S. in 2023 and intends on opening various more new stores in 2024. Nordstrom Rack stores serve as the company's primary source of new customers.
The company is well positioned to support its customers with a scalable platform that has been built to support continued growth.
The company's omni-channel platform positions the company closer to the customer and allows the company to drive customer engagement through better service and greater access to product. In addition, the company's fleet of stores helps the company engages with customers by offering unique events and services such as personal styling, order pickup, returns and alterations at convenient locations. The company's interconnected model is proving that it works - the average customer who shops across both banners, in both stores and online, spends over twelve times more than a customer shopping a single channel or banner.
Products
In order to offer merchandise that the company's customers want, the company purchases from a wide variety of high-quality domestic and foreign suppliers. Additionally, the company utilizes unowned inventory models beyond traditional wholesale arrangements that provide a broader assortment in new and existing categories. The company also has arrangements with agents and contract manufacturers to produce the company's private-brand merchandise.
Nordstrom Rack invests in pack and holds inventory, which involves the strategic purchase of merchandise from some of the company's top brands in advance of the upcoming selling seasons or to minimize inventory gaps from supply chain disruptions, allowing the company to buy larger quantities of relevant items when available, then hold a portion to deploy in periods with high demand, tight supply, facilitate new store openings or system constraints. This inventory is typically held for six months on average.
Loyalty Program
The Nordy Club is the company's customer loyalty program that incorporates a traditional point and benefit system, while providing customers exclusive access to products and events, enhanced services, personalized experiences and more convenient ways to shop. Customers accumulate points based on their level of spending and type of participation. Upon reaching certain point thresholds, customers receive Nordstrom Notes, which can be redeemed for goods or services across Nordstrom and Nordstrom Rack. The Nordy Club benefits vary based on the level of customer spend, and include bonus points days and shopping and fashion events.
The company offers customers access to a variety of payment products and services, including a selection of Nordstrom-branded Visa credit cards, as well as a Nordstrom-branded private-label credit card for Nordstrom purchases. When customers use a Nordstrom-branded credit or debit card, they also participate in The Nordy Club and receive additional benefits, which can vary depending on the level of spend, including early access to the Anniversary Sale, enhanced alterations and stylist benefits and incremental accumulation of points toward Nordstrom Notes.
Although the primary purpose of offering the company's credit cards is to foster greater customer loyalty and drive more sales, the company also receives credit card revenue through its program agreement with TD. Under that agreement, which was amended in the fourth quarter of 2022 and runs through September 2026, TD is the exclusive issuer of Nordstrom-branded consumer credit cards and the company performs account servicing functions for those cards. Credit card revenues, net include the company's portion of the ongoing credit card revenue, net of credit losses, pursuant to the company's program agreement with TD.
Supply Chain Network
The company is continually expanding and enhancing its Supply Chain Network facilities and inventory management systems to support the company's omni-channel capabilities and provide greater access to merchandise selection and faster delivery. As of February 3, 2024, the company's Supply Chain Network consists of: three fulfillment centers that primarily process and ship orders to the company's customers; six distribution centers that primarily process and ship merchandise to the company's stores and other facilities; and one omni-channel center that both fulfills customer orders and ships merchandise to the company's stores.
In addition, the company's existing fleet of Nordstrom and Nordstrom Rack stores enables pickup and returns of online orders and facilitates a broader assortment to the company's digital customers. The company selects locations and customizes inventory allocations to enable merchandise to flow more efficiently and quickly to the company's customers. Nordstrom online purchases are primarily shipped to the company's customers from its fulfillment centers but may also be shipped from the company's Nordstrom stores, distribution centers or omni-channel center. Nordstrom in-store purchases are primarily fulfilled from that store's inventory, but when inventory is unavailable at that store, it may also be shipped to the company's customers from the company's fulfillment centers, distribution centers, omni-channel center or from other Nordstrom stores. Nordstrom Rack online purchases are shipped to the company's customers from its fulfillment centers and distribution centers. Both Nordstrom and Nordstrom Rack selectively use vendor dropship to supplement online offerings, which are then shipped directly from the vendor to the end customer.
The company's first large-scale omni-channel center in Riverside, California, which supports the company's Nordstrom customers in the West Coast region, opened in 2020. The company plans to add Nordstrom Rack inventory and fulfillment to this facility in the future. The company's smaller Local omni-channel hub in Torrance, California ceased operations in the third quarter of 2022 as the company scaled its Riverside location to support demand in that region. Subsequent to year end, on March 5, 2024, the company announced the decision to relocate its San Bernardino fulfillment center operations to the company's West Coast omni-channel center.
Trademarks
The company's most notable trademarks include Nordstrom, Nordstrom Rack, Zella, Z by Zella, BP., Open Edit, Chelsea28, Caslon, Halogen, Tucker + Tate, Treasure & Bond, 14th & Union, Leith, Abound, Harper Canyon and Melrose & Market. Each of the company's trademarks is renewable indefinitely, provided it is still used in commerce at the time of the renewal.
Seasonality
The company's business, like that of other retailers, is subject to seasonal fluctuations and cyclical trends in consumer spending. The company's sales are typically higher in the company's second quarter (year ended February 2024), which usually includes most of the company's Anniversary Sale, and in the fourth quarter due to the holidays. One week of the company's Anniversary Sale shifted from the second quarter in 2022 to the third quarter in 2023.
History
Nordstrom, Inc. was founded in 1901. The company was incorporated in 1946.
The Analyst Price Target shows the analysts’ low, high, and average target at a glance.
