Retailers and consumers grumbled about the weak economy throughout 2011, but shopping rebounded for more-affluent shoppers, and the rebound helped department stores such as Nordstrom Inc. and Saks Inc. report solid sales in the past year.
Through bullish and bearish markets, Nordstrom has consistently showed strong sales performances. Throughout 2011 the Seattle-headquartered retailer consistently reported same-store sales in the mid-to-high single digits. This secure foundation helped them plan in 2011 for a prosperous future.
In February, the retailer acquired online private-sale retailer HauteLook Inc. for $180 million in Nordstrom stock. In a recent financial document, Nordstrom noted more consumers choose to shop online, so investments in technology would be increased. Physical stores will continue to be crucial to Nordstrom. In March, the retailer confirmed plans to build a full-line store at the Americana at Brand retail center in Glendale, Calif., in 2013. In 2011, the company opened three Nordstrom full-line stores and 18 Nordstrom Rack stores and relocated two Nordstrom Rack stores. It also debuted a unique New York boutique, called Treasure&Bond, whose profits will be donated to charity.
The past year also saw a continued rebound for Saks. The luxury department store suffered through a horrible 2009, when it reported same-store declines in the high double digits. In April 2009, its same-store sales plummeted 31.3 percent compared with the same time in the previous year. Saks Chef Executive Stephen Sadove began a process of trimming stores in 2010 and 2011, which saw the shuttering of Saks locations in San Diego and Mission Viejo, Calif.; Denver; and Portland, Ore.
Like Nordstrom, Saks invested more in its online presence. It debuted an iPad app this year and redesigned its Saks POV portal site. Other plans included opening licensed stores in underserved luxury markets such as Almaty, the largest city in Kazakhstan. The Almaty Saks will debut in August 2012.
The future looks brighter for Saks, said retail analyst Michael Exstein of Credit Suisse. In a recent research note, he said Wall Street has more confidence in Saks because the retailer is showing stronger balance sheets and has produced an assertive push into e-commerce.
In addition, four segments—the New York flagship, its branch locations, its e-commerce and discounter Saks Off 5th—are all gaining strength. However, they are not gaining strength at the same speed. “The Direct and Off 5th segments continue to grow; the challenging branch locations should continue to gradually diminish in their significance to the company’s overall performance,” Exstein said.—Andrew Asch
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