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For 104-year-old Nordstrom, 2004 was
a year of firsts.
The upscale retailer exceeded $7 billion
in annual sales for the first time in its history. Put
into perspective, it took the company 83 years to sell
$1 billion worth of suits, purses and shoes in a year.
In December, it did so in a month — another first.
"What's most important about ...
the business of fashion is: 'What's it mean to sales?,'
" President Blake Nordstrom told shareholders yesterday
at the company's annual meeting at its downtown Seattle
headquarters.
"Because sales are the truth, and
it's the number one way to measure how we're doing as
merchants."
Blake Nordstrom, who assumed the helm
in August 2000 after the company's "Reinvent Yourself"
campaign sputtered with shoppers, ticked off a list of
recent company accomplishments to 350 shareholders:
• Its stock has climbed about 230 percent
since the start of 2001.
• It has posted 24 months of consecutive
same-store sales gains — a key retail gauge that measures
sales for stores open at least a year.
• Its gross profit as a percentage of
sales reached 36.1 percent, a company high and a sign
of its success at chipping away at costs.
• Its board yesterday approved a 2-for-1
stock split, the first split in seven years and the seventh
since Nordstrom debuted on the New York Stock Exchange
in 1971.
Shareholders of record on June 13 will
receive the additional shares on or about June 30, the
company said.
Last week, the company increased its
quarterly dividend by 31 percent to 17 cents a share.
Nordstrom's turnaround — achieved in
about five years — is partly attributed to its substantial
investment in a computerized inventory system, which has
given the company's buyers and salespeople the data to
make smarter decisions about what it sells.
If the company understands what apparel
and accessories appeal to its customers, its technology
identifies what colors, sizes and quantities to buy and
keep in stock, enabling Nordstrom to sell more items at
full price.
Inventory is "perishable,"
Blake Nordstrom said. "If you're buying the wrong
stuff, you get markdowns."
Nordstrom is known for its legendary
customer service, and part of yesterday's meeting included
reading some of the letters the company received last
year, including a particularly candid one from a woman
in Atlanta.
The woman wrote to thank two employees:
a woman who helped her pick out perfume and a man who
saw her struggling with four bags and offered to carry
them to her car.
"Well, I must say I was shocked
because I didn't think there were any more gentlemen left
in Atlanta," she wrote about the offer. "I was
wrong."
She then closed her letter by praising
their "clean clean" restrooms, adding that an
unnamed competitor's "ladies rooms are like sewers.
I never use them."
"Never underestimate the power of
a clean restroom," said Erik Nordstrom, the company's
executive vice president of full-line stores, who read
the letters.
In others news, Nordstrom yesterday agreed
to give purchasing preference to suppliers who don't use
mulesing to collect wool from sheep. The practice, used
in the Australian wool industry, involves removing the
wool-bearing skin from the hindquarters of sheep.
The company met with the PETA (People
for the Ethical Treatment of Animals), which has campaigned
against mulesing and other practices surrounding Australia's
live-exports trade.
Nordstrom is a member of the Business
for Social Responsibility group, a collection of retailers
that have urged the wool industry to find other alternatives
to mulesing.
"They purchase enough wool to make
a difference," said David Benjamin, special-products
coordinator for PETA.
Nordstrom's shares closed yesterday at
$59.74, down 7 cents.
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