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Category: Nordstrom (JWN)
Date: 2 March 2021 Stock price of Nordstrom (JWN): $38.26 Market Capital Of Nordstrom : $5.93 billion We take a more detailed look at Nordstrom (JWN) a fashion retailer that offers an extensive selection of high-quality brand-name and private label merchandise focused on apparel, shoes, cosmetics and accessories.
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With a "Phygital” strategy that combines 320,000 physical distribution outlets in many Associations of Southeast Asian Nations (“ASEAN”) countries, to an Omni-channel online digital platform, the Company’s EbixCash Financial exchange portfolio encompasses leadership in areas of domestic & international money remittance, foreign exchange (Forex), travel, pre-paid & gift cards, utility payments, software solutions for lending and wealth management etc. in India and other markets"
More About Nordstrom
Founded in 1901 as a retail shoe business in Seattle, Nordstrom later incorporated in Washington State in 1946 and went on to become one of the leading fashion retailers based in the U.S. We aspire to be the best fashion retailer in a digitally-connected world by remaining focused on our customers, serving them through our three strategic pillars: providing a compelling product offering, delivering outstanding services and experiences and leveraging the strength of the Nordstrom brand. We offer an extensive selection of high-quality brand-name and private label merchandise focused on apparel, shoes, cosmetics and accessories. No matter how customers choose to shop, we are committed to delivering the best possible service, product and experience, including alterations, order pickup, dining and styling, to make shopping fun, personalized and convenient.
We invested early in our omni-channel capabilities, integrating our operations, merchandising and technology across our stores and online, in both our Full-Price and Off-Price businesses. We have more than 60 combinations in which merchandise can be ordered, fulfilled and delivered. Though this has enabled us to serve customers in multiple ways, we are focused on providing a seamless experience for our customer across stores and online. We view our business as one reportable “Retail” segment, which aligns with how management operates, evaluates and views the results of our operations
We invested early in our omni-channel capabilities, integrating our operations, merchandising and technology across our stores and online, in both our Full-Price and Off-Price businesses. We have more than 60 combinations in which merchandise can be ordered, fulfilled and delivered. Though this has enabled us to serve customers in multiple ways, we are focused on providing a seamless experience for our customer across stores and online. We view our business as one reportable “Retail” segment, which aligns with how management operates, evaluates and views the results of our operations
Competition Of Nordstrom
We operate in a highly competitive business environment. We compete with other international, national, regional and local retailers, including internet-based businesses, omni-channel department stores, specialty stores, off-price stores and boutiques, which may carry similar lines of merchandise. Our specific competitors vary from market to market. We believe the keys to competing in our industry are what will always matter most to our customers: providing compelling product and outstanding service, both digitally and in stores, backed by people who care. This includes serving customers on their terms by providing a seamless digital and physical experience, offering compelling, curated and quality products across a range of price points, and strategically partnering with relevant and limited distribution brands, all in top markets
Segments Of Nordstrom
Full-Price
This combination of retail platforms and services allows us to provide our customers with a unique and seamless shopping experience, engaging them on their terms. We continue to evolve our Full-Price business, blurring the lines between the digital and in-store experience. This primarily includes traditional in-store and online shopping, ship-to or pickup from a store of choice, and try on at home and pay only for what is kept, among various other personalized services including convenient access to alterations. As our Full-Price business evolves, our market strategy leverages our inventory to serve customers on their terms through investments in digital capabilities and in people, product and place. Our goal is to gain market share while driving customer engagement and inventory efficiencies. There are two elements to this strategy: first, we provide customers a greater selection of merchandise available for next-day pickup or delivery, without increasing inventory levels. Second, we are increasing engagement with customers by offering express services such as order pickup, returns and alterations at additional convenient locations. We accelerated our strategy to five of our top markets — New York, Los Angeles, Chicago, Dallas and San Francisco — in 2019 and will expand our strategy into five additional markets in 2020, including Philadelphia, Washington, D.C., Boston, Seattle and Toronto. In addition, we are integrating Trunk Club into Nordstrom full-line stores and Nordstrom.com to create a cohesive styling offering across Nordstrom and to gain efficiencies.
Off-Price
In Off-Price, Nordstrom Rack and Nordstromrack.com purchase merchandise primarily from the same vendors carried in our Full-Price channel and also serve as outlets for clearance merchandise from the Full-Price channel. NRHL offers both a persistent selection of Off-Price merchandise, as well as limited-time flash sale events on fashion and lifestyle brands. Nordstromrack.com combines the technology expertise of HauteLook with the merchant expertise of Nordstrom Rack.
- 110 Nordstrom-branded FLS in the U.S.
- six FLS and six Rack stores in Canada
- Full-Price Nordstrom.com website and mobile application
- TrunkClub.com website and six Trunk Club clubhouses
- three Jeffrey boutiques
- five Nordstrom Locals Our Full-Price operating segment is a combination of physical and digital retail assets.
This combination of retail platforms and services allows us to provide our customers with a unique and seamless shopping experience, engaging them on their terms. We continue to evolve our Full-Price business, blurring the lines between the digital and in-store experience. This primarily includes traditional in-store and online shopping, ship-to or pickup from a store of choice, and try on at home and pay only for what is kept, among various other personalized services including convenient access to alterations. As our Full-Price business evolves, our market strategy leverages our inventory to serve customers on their terms through investments in digital capabilities and in people, product and place. Our goal is to gain market share while driving customer engagement and inventory efficiencies. There are two elements to this strategy: first, we provide customers a greater selection of merchandise available for next-day pickup or delivery, without increasing inventory levels. Second, we are increasing engagement with customers by offering express services such as order pickup, returns and alterations at additional convenient locations. We accelerated our strategy to five of our top markets — New York, Los Angeles, Chicago, Dallas and San Francisco — in 2019 and will expand our strategy into five additional markets in 2020, including Philadelphia, Washington, D.C., Boston, Seattle and Toronto. In addition, we are integrating Trunk Club into Nordstrom full-line stores and Nordstrom.com to create a cohesive styling offering across Nordstrom and to gain efficiencies.
Off-Price
- 242 Off-Price Nordstrom Rack stores in the U.S.
- Off-Price NRHL website and mobile application
- two Last Chance clearance stores
In Off-Price, Nordstrom Rack and Nordstromrack.com purchase merchandise primarily from the same vendors carried in our Full-Price channel and also serve as outlets for clearance merchandise from the Full-Price channel. NRHL offers both a persistent selection of Off-Price merchandise, as well as limited-time flash sale events on fashion and lifestyle brands. Nordstromrack.com combines the technology expertise of HauteLook with the merchant expertise of Nordstrom Rack.
Seasonality Of Nordstrom Earnings
Our business, like that of other retailers, is subject to seasonal fluctuations. Our sales are typically higher during our Anniversary Sale in July and the holidays in the fourth quarter. Beginning in 2018, our Anniversary Sale occurred in our second fiscal quarter. In 2017, our Anniversary Sale occurred in the second and third fiscal quarters. Results for any one quarter are not indicative of the results that may be achieved for a full fiscal year.
Working Capital Requirements Of Nordstrom
Our working capital requirements are funded primarily through cash flows generated from operations. In addition, we have access to the commercial paper market and can draw on our revolving credit facilities for working capital, capital expenditures and general corporate purposes. Consistent with our seasonal fluctuations, our working capital requirements have historically increased during the months leading up to the Anniversary sale and the holidays as we purchase inventory in anticipation of increased sales
Loyalty Program Of Nordstrom
We evolved our customer loyalty program with the launch of The Nordy Club in October 2018, which incorporates a traditional point system and the favorite benefits of our previous program, 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 offered at Nordstrom FLS, Nordstrom.com, Nordstrom Rack and NRHL. Nordstrom cardmembers can also earn rewards at Trunk Club. The Nordy Club member benefits will vary based on the level of customer spend, and include Bonus Points days and shopping and fashion events. We offer customers access to a variety of payment products and services, including a selection of Nordstrom-branded Visa® credit cards in the U.S. and Canada, as well as a Nordstrom-branded private label credit card for Nordstrom purchases. When customers use a Nordstrombranded 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, Nordstrom to You (an in-home stylist) and incremental accumulation of points toward Nordstrom Notes
Supply Chain Of Nordstrom
Our “Supply Chain Network” consists of:
We expanded our Supply Chain Network facilities and enhanced our inventory management systems to support our omni-channel capabilities and provide greater access to merchandise selection and faster delivery. We select locations and customize inventory allocations to enable merchandise to flow more efficiently and quickly to our customers. Full-Price online purchases are primarily shipped to our customers from our fulfillment centers but may also be shipped from our Nordstrom FLS, distribution centers or omni-channel centers. FullPrice 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 our customers from our fulfillment centers, distribution centers, omni-channel centers, or from other Nordstrom FLS. Off-Price online purchases are shipped to our customers from our fulfillment centers and distribution centers. Both businesses selectively use vendor dropship to supplement their online offerings, which are then shipped directly from the vendor to the end customer. Our first large-scale omni-channel center in Riverside, California will initially support our Full-Price customers in the West Coast region and is expected to open in Spring 2020. Off-Price inventory and fulfillment will be added to this facility in the future. Our smaller Local Omni-channel Hub in Torrance, California was opened in 2019 and supports the greater Los Angeles market as part of our market strategy and will have highly curated inventory that serves the specialized needs of that market
- fulfillment centers that primarily process and ship orders to our customers
- distribution centers that primarily process and ship merchandise to our stores and other facilities
- omni-channel centers that both fulfill customer orders and ship merchandise to our stores.
We expanded our Supply Chain Network facilities and enhanced our inventory management systems to support our omni-channel capabilities and provide greater access to merchandise selection and faster delivery. We select locations and customize inventory allocations to enable merchandise to flow more efficiently and quickly to our customers. Full-Price online purchases are primarily shipped to our customers from our fulfillment centers but may also be shipped from our Nordstrom FLS, distribution centers or omni-channel centers. FullPrice 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 our customers from our fulfillment centers, distribution centers, omni-channel centers, or from other Nordstrom FLS. Off-Price online purchases are shipped to our customers from our fulfillment centers and distribution centers. Both businesses selectively use vendor dropship to supplement their online offerings, which are then shipped directly from the vendor to the end customer. Our first large-scale omni-channel center in Riverside, California will initially support our Full-Price customers in the West Coast region and is expected to open in Spring 2020. Off-Price inventory and fulfillment will be added to this facility in the future. Our smaller Local Omni-channel Hub in Torrance, California was opened in 2019 and supports the greater Los Angeles market as part of our market strategy and will have highly curated inventory that serves the specialized needs of that market
Inventory Management Of Nordstrom
We plan our merchandise purchases and receipts to coincide with expected sales trends. For instance, our merchandise purchases and receipts increase prior to our Anniversary Sale, which has historically extended over the last two weeks of July. We purchase and receive a larger amount of merchandise in the fall as we prepare for the holiday shopping season (from late November through December). At Nordstrom Rack, we invest in pack and hold inventory, which involves the strategic purchase of merchandise from some of our top Full-Price brands in advance of the upcoming selling seasons, to take advantage of favorable buying opportunities. This inventory is typically held for six months on average. In order to offer merchandise that our customers want, we purchase from a wide variety of high-quality domestic and foreign suppliers. We also have arrangements with agents and contract manufacturers to produce our private label merchandise.
Trademarks Of Nordstrom
Our most notable trademarks include Nordstrom, Nordstrom Rack, HauteLook, Trunk Club, Halogen, BP., Zella, Caslon, 1901, Treasure & Bond and Tucker+Tate. Each of our trademarks is renewable indefinitely, provided it is still used in commerce at the time of the renewal.
Employees Of Nordstrom
During 2019, we employed approximately 68,000 employees on a full- or part-time basis. Due to the seasonal nature of our business, employment increased to approximately 75,000 in December 2019 due to the holidays. All of our employees are non-union. We believe our relationship with our employees is good.
Nordstrom (JWN) stock price chart over the last 5 years
The image below shows the stock price chart of Nordstrom (JWN) over the last 5 years. And it's not been a good time for Nordstrom (JWN) stockholders. Over the last 5 years the stock of Nordstrom decreased by-33.6%. Pretty sure no investor would be happy with those kind of returns.
Latest Stock Valuation Of Nordstrom (JVN)
Based on the latest earnings report provided by Nordstrom (JWN) we value the stock of Nordstrom at $38.70 a stock. We therefore believe the stock of Nordstrom is fully valued at its current stock price of $38.26 and rate the stock Nordstrom as a hold
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