Nordstrom Emphasizing L.A., Expanding Local
Copresident Blake Nordstrom said the company was looking to take a more personal approach in Los Angeles.
Nordstrom Inc. just made a splash in New York last month, cutting the ribbon on a Columbus Circle men's store as prelude to the better than $500 million women's store set to open nearby next year.
But for a real look at the company's future, Los Angeles offers a better lens.
Copresident Blake Nordstrom underscored the importance of the L.A. market at the company's annual meeting Monday and said Nordstrom would expand on its test of the Local concept there with two more stores in the market.
The Local store borrows a page from Bonobos — which Nordstrom used to have a stake in — and carries no inventory, but serves espresso and alcohol and offers a showroom experience where looks can be tried on and shipped later.
It's a mix of face-to-face contact and digital delivery that builds relationships with individual consumers and dovetails on one of Nordstrom's key themes for the future.
“What we're pivoting and moving to… is how we can best serve an individual customer versus looking at the business just through the four walls of the store,” Nordstrom said. “We're learning a lot through Nordstrom Local, and we think there's more ways that we can serve the customer.”
He said Los Angeles is the company's largest market, with four million customers, $1 billion in sales and 16 full-line stores, 27 Nordstrom Rack doors and the Local store as well as a distribution center and fulfillment center.
“Put that all together, we think we can service the customer on their terms better than our competition,” Nordstrom said. “And we can avail ourselves to a much broader assortment of inventory, and we literally can deliver in hours if that's what the customer so chooses. So we're really trying to accelerate those efforts in L.A.”
In New York, the company is still getting its feet wet.
In response to a shareholder question, copresident Peter Nordstrom said: “I don't know that we can differentiate ourselves a lot in terms of what we sell because — it is true that everything in the world is available in New York already. But what we try to do is not try to out-Bergdorf Bergdorf Goodman or out-Barneys Barneys, but be the best Nordstrom store we can be.”
Shareholders also wanted some behindthe-scenes information on the drama that unfolded over the last year in which the Nordstrom family, which owns about a third of the company, tried and in March ultimately failed to take the company private.
Philip Satre, chairman, noted that it was a very involved process with the family and a special committee of the board working with advisers and trying to find an agreeable price.
“Where it got very complicated is that the financial markets are still — despite all of the good things Blake had to say here, the financial markets are still uncertain about the future of what they would characterize as department store retail, mall retail, however you want to look at it,” Satre said. “So where you get into a difficult situation is when the financial markets can't meet the expectations of the special committee in working with the family group. And for that reason, we've decided that there wasn't a price that worked and we discontinued the process.”
While a deal eluded Nordstrom, Satre reiterated the board's confidence in the company's strategy and its Nordstrom-led management.