Top 100 Retailers Power Players: Luxury Apparel

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As a group, luxury department stores have been losing sales for much of the last couple of years, according to the U.S. Department of Commerce. Bucking this trend to some extent is Nordstrom. Even though it is the largest seller of luxury apparel in the country, Nordstrom’s financial performance is being buoyed by its off-price Nordstrom Rack operations.

The dichotomy was readily evident when the company reported its 2016 results. “Nordstrom ends its fiscal year as a company of two halves: the mainstream business, which is struggling to grow, and the off-price business which, overall, is motoring along nicely,” said Neil Saunders, managing director of GlobalData Retail.

Nordstrom’s online sales are another bright spot for the company; e-commerce generates almost a quarter of all Nordstrom’s sales, says Mike Koppel, the company’s chief financial officer. “Our business has shifted from a four-wall model to one that supports multiple channels,” he says.

Koppel also points out that, “Interestingly enough, in 2017 we’re starting to see the profitability of online cross over to a higher margin than the store-based business.”

One of the things Nordstrom has been doing to boost store traffic is rolling out a program where web shoppers can earmark garments to be set aside for trying on in stores. More such efforts will be needed to reverse a string of six straight quarters of same-store sales declines in the full-line stores.

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