(Staff and Bloomberg)—Online sales at Nordstrom Inc. are a bright spot for the retailer. Digitally enabled sales—including online sales, buy online pick up in store and its reserve online, try on in store offering—accounted for 29% of the company’s revenue, up from 25% during the same quarter last year. First-quarter web sales grew 18% year over year to about $1 billion.
Nordstrom is No. 16 in the Internet Retailer 2018 Top 1000.
However, with unseasonable temperatures crimping demand for apparel in the first quarter, comparable sales missed analysts’ estimates. The closely watched measure rose 0.6%, the department store chain said Thursday after the markets closed. Analysts were expecting an increase of 1 percent, according to Consensus Metrix.
Digital sales are picking up where store sales are falling, according to co-president Blake Nordstrom in a conference call transcribed by Seeking Alpha. Nordstrom Rack and HauteLook both saw “softness” for first-quarter sales in stores, but online sales picked up for those brands.
Nordstrom has sought to drive sales at its value-focused Rack chain as a way to insulate the merchandise at its full-price stores from discounts, but the results may cause investors to question that approach. The Seattle-based retailer also is trying new strategies, such as an inventory-free store, after the board ended talks in March with the Nordstrom family to take the company private.
Nordstrom posted sales of $3.56 billion in the first quarter, which ended May 5, up 6%. That topped the $3.45 billion analysts predicted.
Last month, Nordstrom opened its first full department store in Manhattan. The men’s store will be followed by a women’s location across the street in the fall of 2019. The men’s store offers customers the option to pick up goods they buy online 24-hours a day, even when the store is closed.
In March, a special committee of the retailer’s board ended talks with the Nordstrom family when the two sides couldn’t agree on a buyout price. Earlier that month, the board had rejected a proposal that would have valued Nordstrom at about $8.4 billion, or $50 a share. The family had been working since last June to take the 117-year-old retailer private so it could revive the business outside of the public eye.
The group representing the founding family included the retailer’s co-presidents, Blake Nordstrom, Peter Nordstrom and Erik Nordstrom, a trio that operates in place of a traditional chief executive officer. On the other side of the table was Nordstrom’s independent directors, such as JPMorgan Chase & Co. executive Gordon Smith and TaskRabbit Inc. CEO Stacy Brown-Philpot.Favorite