A heavy focus on its online channel is paying off for retail chain Nordstrom Inc., as the merchant reported a nearly 20% increase in sales on Nordstrom.com during the first quarter and 50% growth on HauteLook.com and NordstromRack.com. Sales on the three e-commerce properties increased 24.6% to $597 million from $479 million, and accounted for nearly 19% of retail sales.
Nordstrom, No. 19 in the Internet Retailer 2015 Top 500 Guide, launched NordstromRack.com—the first e-commerce site for its discount division—in May 2014. It acquired web-only flash sale merchant HauteLook in 2011.
Nordstrom’s expansion into Canada and its acquisition of men’s web-only apparel retailer Trunk Club also contributed to growth during the quarter. “Over the past several years, we’ve been making strategic investments in Canada, Trunk Club and HauteLook,” co-president Erik Nordstrom told analysts on its quarter-end conference call last week. “In the first quarter, these businesses added $100 million in sales.”
The merchant opened its first store in Canada, in Calgary, in September. It has since opened another in Ottawa and plans four more by 2017.
Company executives say the customer base on HauteLook.com, which sells a limited selection of goods for a short period of time, is different from that of NordstromRack.com, but that having both properties is beneficial because Nordstrom can capture consumers with varying shopping preferences.
“One of the interesting things about launching NordstromRack.com is seeing the difference in customers between that business and our HauteLook business,” Nordstrom told analysts. “The flash sale business is still a very viable business, a big business. While there’s some customers who go back and forth, they are a separate customer. Some customers prefer flash, some categories are stronger in flash and some prefer persistence. So we really like the combination.”
For the period ended May 2, Nordstrom reported:
- Nordstrom.com sales of $480 million, a 19.7% increase compared with $401 million in the first quarter of the prior year.
- NordstromRack.com and HauteLook.com sales of $117 million, up 50.0% from $78 million. The e-retailer says much of the growth comes from the launch of NordstromRack.com in the second quarter of 2014.
- Sales on the three e-commerce properties increased 24.6% to $597 million from $479 million.
- Total retail sales of $3.19 billion, a 9.6% increase compared with $2.91 billion. Retail sales include sales in Nordstrom and Nordstrom Rack stores in the U.S. and Canada, in addition to sales on TrunkClub.com, which Nordstrom acquired in the third quarter of 2014.
- Comparable-store sales, in which Nordstrom includes e-commerce sales, increased 4.4%.
- The web accounted for 18.7% of retail sales compared with 16.5% a year earlier.
Nordstrom’s online customers can expect faster delivery thanks to its third fulfillment center in Pennsylvania coming online this fall, company executives say.
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