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Nordstrom posted holiday results showing sales declines over the busiest retail season.
For the nine-week period ending Jan. 1, Nordstrom shared the following data:
- Net sales across all channels declined 3.5% from the same period of 2021.
- Nordstrom banner sales decreased 1.7%
- At Nordstrom Rack, which is Nordstrom’s off-price store, sales were down 7.6%.
- Outlook: Revenue growth for fiscal year 2022 is now expected to be at the low level of its 5-7% outlook. The adjusted EBIT outlook, which measures profit, was revised to 3.1 to 3.3%, down from 4.3-4.7%.
CEO Erik Nordstrom said the sales totals were even below 2019 norms.
"The holiday season was highly promotional, and sales were softer than pre-pandemic levels,” said Nordstrom, in a statement. “While we continue to see greater resilience in our higher income cohorts, it is clear that consumers are being more selective with their spending given the broader macro environment.”
On the supply side, Nordstrom also said it took more markdowns than planned toward the goal of ending the year in a clean inventory position. Year-end inventory is expected to finish at a double-digit percentage below 2021, and in line with 2019 levels, Nordstrom said.
"Having a healthier inventory level and mix positions us well to react quickly to changing consumer demand," said Pete Nordstrom, president and chief brand officer of Nordstrom. "Given the continued uncertain environment, we remain focused on executing with flexibility and agility, including conservative buy plans and faster inventory turns.”
Here are a few takeaways for anyone in retail to consider:
Following in the footsteps of Macy’s, Nordstrom is the latest department store retailer to post a more lackluster holiday period. The more difficult consumer picture, colored by converging inflation and interest rates, made the holidays particularly discount-heavy, which in turn hurt both topline sales and profits. Across retail, sales grew 5.3% for the holidays, which was below the National Retail Federation forecast.
The economic pullback is far-reaching enough that every retailer can likely feel justified in pointing to it at this time, especially as they continue to work out of inventory issues as Nordstrom did. In either case, discounts are the way to get through it, and those hurt margins.
Some of Nordstrom’s issues appear to be internal. GlobalData Managing Director Neil Saunders noted that the Nordstrom decline of 1.7% was a “modest reduction,” but said it “was delivered at a time when Nordstrom should have come into its own as consumers took a keen interest in new fashions for the holidays. That it didn’t is a function of its own merchandising and inventory missteps.”
Adding to the problems, Nordstrom Rack posted a bigger decline, and “does not seem to have been able to get back on the front foot,” since the pandemic as a result of assortment and inventory issues at stores.
So what can be done? Saunders suggests adding categories beyond fashion.
“While department stores did put in some effort to create areas which showcased non-apparel gifts for the holidays, this was a rather half-hearted effort,” Saunders said. “In short, Nordstrom needs to think carefully about how it can maximize spending from its shoppers and make itself a must-visit destination.”
Digital chief departs
Nordstrom is also starting the year looking to fill a key digital leadership role.
Jason Gowans was named SVP and chief digital officer at Levi Strauss & Co., where he will focus on bringing together engineering, data, AI and digital product management in both ecommerce and go-to-market.
Gowans most recently served as SVP of digital commerce at Nordstrom, where he led ecommerce for both Nordstrom and Nordstrom Rack. It caps a decade-long run at the company where he also led data science and analytics across all functions.
While there's void to fill at the company, it's a reminder: Ecommerce remains a growing area for Nordstrom, with top talent. In fact, it might be a good place to test expansion into the new categories that Saunders suggested.
Trending in Retail Channels
On the Move has hiring news from Walmart US, Etsy, commercetools and more.
This week, retailers are bringing on C-level talent in areas such as people, operations and transformation. Plus, Kohl’s appoints an activist investor’s choice for CEO, Fanatics taps a former Snap executive for livestream shopping and Etsy brings aboard Facebook’s former general counsel.
Tom Kingsbury was appointed CEO of Kohl’s. Kingsbury was named interim CEO in December upon the resignation of now-Levi’s President Michelle Gass. Now, Kingsbury will have the job on a permanent basis. Kingsbury served as CEO of Burlington Stores from 2008-2019. Kingsbury was nominated by activist investor Macellum Advisors, which was pushing for change at Kohl’s. With Kingsbury’s appointment as CEO, Macellum has agreed to a “multi-year standstill.”
Judy Werthauser was appointed chief people officer at Walmart U.S. Werthauser comes to the teen-focused retailer from Five Below, where she served as EVP and chief experience officer. Over her four-year tenure, the chain grew from about 750 stores to more than 1,300 locations. Werthauser also served on the board of BJ's Wholesale Club, and is now resigning from that position. “I am excited to work alongside the world-class Walmart U.S. team as they bring the purpose of building a better world – helping people live better and renewing the planet while building thriving, resilient communities – to life,” Werthauser wrote in a LinkedIn post.
Mike Brewer was named chief operating officer at Crate & Barrel Holdings, overseeing operations at Crate & Barrel, CB2, Crate & Kids and Hudson Grace. Brewer brings 20 years of experience from Nike, where he served in roles including sourcing, manufacturing and supply chain. Crate & Barrel said Brewer’s appointment was part of the home retailer’s “ongoing efforts to evaluate and alter its structure in ways that help support overall growth.”
Keith Melker. (Courtesy photo)
Keith Melker was appointed chief strategy and transformation officer at JCPenney. Melker comes to the department store retailer from Wehner Multifamily, where he served as CEO. He was also a previous chief strategy officer at the Kimberly-Clark Corporation. Melker will oversee the transformation office, which includes ownership of metrics such as profitable traffic, inventory management, digital growth and strategic partnerships. With this move, Katie Mullen will remain chief strategy officer.
Blaine Trainor is joining ecommerce software provider commercetools as VP of global partnerships and alliances. In the role, Trainor will lead the headless commerce company’s partnerships ecosystem, working with companies including Deloitte, CapGemini, AWS and Google Cloud. Trainor previously served in senior leadership roles at SAP over a 12-year tenure, and also held sales roles at hybris software and Sterling Commerce.
Nick Bell, a former Google and Snap executive, will lead a new livestream shopping division of Fanatics, Footwear News reported. Bell previously led the teams behind Google Search Experience, and served as VP and global head of content and partnerships at Snap Inc. Bell will lead the Fanatics Live division, which will launch a standalone app that is geared toward collectibles.
NIck Bell. (Photo via LinkedIn)
Colin Stretch was appointed chief legal officer at corporate secretary at Etsy, effective Feb. 14. Stretch previously served as general counsel at Facebook from 2013-2019. He then spent two years as leader in residence at Columbia University Law School's Reuben Mark Initiative for Organizational Character & Leadership, and went on to the law firm Latham & Watkins.
"Colin's extensive experience will be critical to Etsy's efforts to ensure we remain a safe and trusted marketplace, broaden our reach across all our brands, and advocate for microbusinesses around the world,” said CEO Josh Silvermann, in a statement.