Nordstrom Inc - Financial Statement Analysis

Overview

Based in Seattle, WA, Nordstrom, Inc. (NYSE: JWN) is a premium fashion retailer offering clothing, shoes, accessories, and cosmetics for women, men, and children. The company was originally founded in 1901 by Swedish immigrants John W. Nordstrom and Carl Wallin. They partnered up and opened a shoe store in downtown Seattle called 'Wallin & Nordstrom'. By the late 1920s, both Wallin and Nordstrom retired from the shoe business selling their shares to Nordstrom's sons--Everett, Elmer, and Lloyd. Over the next few decades, the brothers opened additional stores throughout the states of Washington and Oregon.

By the 1960s, the company not only offered shoes but eventually entered the clothing apparel market as well. In 1968, the Nordstrom sons retired from the business and handed down their interests to the third Nordstrom generation. Then by 1971, the firm went public and eventually changed its name to Nordstrom, Inc. Two years after the IPO, the firm was able to achieve a major milestone in its company history generating more than $100 million in sales making Nordstrom the largest fashion specialty store on the West Coast and becoming one of the nation's top fashion retailer.

Today the firm operates 231 stores in 31 states employing approximately 57,000 employees. The firm operates through a number of channels selling both brand name and private label merchandise. Its current operations consist of hundreds of full-line Nordstrom department stores and discount stores under the name Nordstrom Rack. In the east coast, it also operates a couple of Jeffrey Boutiques and one Treasure & Bond store where a hundred percent of the sales proceeds after costs are entirely donated to local community programs in New York. Additionally, the company also generates e-commerce related sales through its recent acquisition of Hautelook an online retailer specializing in the sale of private label merchandise.

Aside from the fashion retail business, Nordstrom, Inc. also manages its own credit card business segment which stands out in the retail industry today mainly because over the last decade most department store chains have sold off their credit card portfolios to larger bank institutions. This business segment operates under the name Nordstrom fsb. It is a federal savings bank that provides deposit accounts, in-store credit cards, two Nordstrom VISA credit cards, and a debit card programs to consumers. According to Nordstrom's chief financial officer Mike Koppel, the company views the in-store credit card program as strategically important because of its focus on building customer loyalty (Engleman). Through its credit program, Nordstrom believes it will allow the company to integrate their customer loyalty programs and increase sales.

Company Strategy

According to the article Economic Analysis on Fashion

...