APRIL RETAIL SALES REBOUND. WILL RETAILER STOCKS RECOVER?

Wall Street analysts are calling last week “Retail Wreck” due to numerous retailers’ news of poor sales, profits and future outlook on consumer spending. April retail sales came in higher than expected with a positive 1.3% gain, the highest gain in a year. Will strong sales in the first month of the second quarter help with a stock rebound for retailers?

Last week’s poor results were reported by many retailers, including Macy’s, Kohl’s and Nordstrom’s. Department stores are also responding to the strong online sales versus in-store that was reported, with online sales soaring 10.2% over last year. They are struggling with putting inventory in the right place to meet their increasingly complicated inventory and distribution demands.

Investors are waiting for home-improvement results this week from Home Depot, Lowe’s, Target and Wal-Mart to try to determine if the profit misses in the retail space is a problem just for department stores and apparel makers, or if it is a broader problem ahead for the consumer-driven US economy.

See the Accelerated Analytics’ blog from last week, reporting on the stock decreases across several retailers and apparel manufacturers: http://www.acceleratedanalytics.com/blog/2016/5/12/retail-stock-market-was-a-bear-yesterday-dropping-to-worst-l.html and continue to monitor our blog http://www.acceleratedanalytics.com/blog/ page this week as additional retailers report on Q1 results.

Sources: The Wall Street Journal, USA Today

Study Shows Department Stores Should Close Locations to Restore Productivity

According to new research by Green Street Advisors, department stores need to close hundreds of locations to recapture the level of productivity they had a decade ago in 2006. The real-estate research firm estimates that approximately a fifth of all anchor space in U.S. malls, or roughly 800 stores, could be a part of the closures.

As retail business has shifted to discounters or online merchants like Amazon.com in recent years, many large retailers have closed locations. Sears recently said it would close 78 stores including 68 Kmarts this summer as part of a plan that was announced in February. But according to Green Street, Sear would need to close 300 or 43% of its stores to regain the sales per square foot that it had in 2006.

To return to 2006 productivity levels, Green Street estimates that JC Penney would need to close 320 stores (31%), Nordstrom Inc. would need to close 30 stores (25%) and Macy’s, which closed 40 stores last year, would need eliminate an additional 70 stores (9%). 

Sales at U.S. department stores averaged $165 per square foot in 2015 which represents a 24% drop since 2006. But stores only reduced their physical footprint by a total of 7% over the same time period.

“Department stores used to be a great catchall for different brands, but today many of the brands have stores of their own, and shoppers can also find them online,” said DJ Busch, a senior Green Street analyst.

The stores have declined to comment on the Green Street Report, but have indicated that closing a large number of stores isn’t the right strategy to improve productivity in today’s dynamic retail market.

“There’s a misperception out there that when we close a store, that business transfers online,” Ed Record, Penney’s chief financial officer, told analysts in November. “When we close a store, particularly in a small market, we see our dot-com business go down.”

Macy’s has attempted to lure shoppers into their stores by adding Bluemercury beauty shops and Backstage discount stores to it’s department stores, and a spokesman for Nordstrom said that all of its stores are profitable, and closing stores “is not our normal practice.”

Source: The Wall Street Journal

NORDSTOM IS RANKED FAVORITE RETAILER IN RECENT SURVEY

A survey of over 5,700 consumers found that Nordstrom ranked first among retailers in customer satisfaction. It specifically ranked highest scores for atmosphere, checkout speed and finding the correct size/product the customer was looking for. One in five customers surveyed indicated they were dissatisfied in general with their fashion retail experience across all retailers. 40% of these customers indicated that the sales experience was very important to them, and that less than half of them were approached by a sales associate, which was key to their satisfaction. Nordstrom’s sales associates assisted customers the most and received the highest satisfaction scores.

Coming in behind Nordstrom were Marshalls, H&M, Ross, Kohl’s and Macy’s.

With merchandise selection and ease of finding items and size selection the top of customers’ needs, retailers and vendors recognize the importance of partnering to share point of sale and inventory data in order to optimize store assortments. Many vendors, such as Brahmin Leather, Anastasia Beaute and The Sak, utilize Accelerated Analytics to monitor and act on inventory levels and customer buying patterns in Nordstrom and other retailers to maximize their effectiveness in this area.

Source: Chain Store Age

Nordstrom's Announces Positive Q2 2015 Earnings Results

Nordstrom announced Thursday total net sales increased 9%, with comparable sales of $3.6 billion increasing 4.9 % over Q2 2014. Comparable sales increases by channel were: US stores up 0.8%, Nordstrom.com up 20%.

Top performing merchandise categories were cosmetics and women’s apparel. Top performing regions were the Southwest and Southeast.

Ending inventory increased 11% over Q2 2014, and was consistent with expectations and projected growth initiatives.

The company opened 350,000 new Nordstrom Rewards accounts, growing to 4.5 million members. Sales from members increased 10% in the second quarter and represented 44% of total sales.

Official remarks from Blake Nordstrom, Co-President, Nordstrom, Inc., included, “our customer is at the center of our strategy as we focus on creating a differentiated experience in each of our businesses. While we've been pursuing distinct strategies to grow each business, we’re also working to link them together to provide our customers with a seamless experience. This is important because we know that when customers engage with us across multiple touch points, their lifetime value and spend increase significantly.”

Source: Nordstrom.com

Analysts Project Retailer Earnings Trends Before Announcemnets This Week

Dropping tourism numbers and consumers saving rather than spending money saved from lower gas prices will affect retailer earnings announcements, say industry analysts.

Several retailers will be making earnings announcements this week: Macy’s on Wednesday, Dillard’s, Kohl’s and Nordstrom on Thursday, and JC Penney on Friday. Analysts report that value retailers with loyalty programs like Kohl’s should report better results than others.

Although retailers saw a weak first two quarters of 2015, analysts are optimistic about the second half of the year looking better. In the apparel and general merchandise category, jewelry is doing well and cosmetics are doing extremely well.

Source: CNBC

KOHL’S, DILLARD’S AND NORDSTROM’S REPORT ON Q1 RESULTS – NORDSTROM REPORTS HIGH LOYALTY PROGRAM SUCCESS

Kohl’s, Dillard’s and Nordstrom’s released Q1 sales results yesterday, on the heels of announcements of Q1 losses from JC Penney and Macy’s.

Despite launching a loyalty program and expanding advertising, Kohl’s reported weak consumer spending, but did report a gain. Kohl’s reported a profit of $127 million, up slightly from $125 million a year earlier. Sales grew 1.3% to $4.2 billion. Kohl’s operated 1,164 stores this year versus 1,160 last year. Kevin Mansell, Kohl's chairman, chief executive officer and president, said: "Sales were modestly below our original expectations for the quarter, but accelerated in the March/April combined period after a weak February. We are very pleased with our earnings results, with a more balanced promotional calendar driving merchandise margin combined with strong expense control."

Dillard’s reported Q1 sales at $109.6 million compared to $111.7 million prior year. Same store sales decreased 1%. Net sales were $1.574 billion, up 1.5% from last year. Sales were strongest in junior’s and children’s apparel, followed by shoes and ladies’ apparel. Sales were weak in the home and furniture category. The company noted that sales in Texas were below company average for Q1. "We are disappointed with our first quarter performance. Our 1% sales decline hampered our ability to leverage operating expenses and to drive net income growth," said Chief Executive William Dillard. "Although inventory is higher than we would like, we believe the levels are manageable."

Nordstrom’s also reported a drop in earnings for Q1. It reported a profit of $128 million, down from $140 million a year ago. However, Nordstrom.com and NordstromRack.com had a combined 70% increase in sales. Net sales increased 9.8% and same store sale increased 4%. Nordstrom’s loyalty program contributed greatly to its results. Members shopped 3 times more frequently and spend 4 times more on average than non-members. With 4.4 million members, sales from members increased 11% in the first quarter and represented 38% of sales.

Source: Retailing Today

Nordstrom Piloting Curbside Text Pickup

Nordstrom is piloting a new service for customers in several US stores, including at its flagship store in downtown Seattle. The service gives customers the ability to text or call the store ahead of time and a store associate will be waiting on the curb with their products when the customer arrives. Nordstrom has allowed in-store pickup of online items since 2008. The retailer also plans to pilot the service for Men’s alterations.

Source: Chain Store Age

BELK INC EXPLORING POSSIBLE SALE OR MERGER

Belk Inc., founded in 1888 by William Henry Belk and in the third generation of Belk family leadership, has hired Goldman Sachs to help it evaluate strategic alternatives, including a potential sale. Belk is the largest family owned department store chain in the US, valued at as much as $4 billion.

In fiscal year 2014, ending January 31, 2015, Belk posted net sales of $4.1 billion, up 1.8% compared to the previous year. After Reuters reported on the potential sale, Belk issued a statement that it had hired Goldman Sachs to help them explore all options and expect to conclude its analysis in the next several months.

US consumer spending has been slow moving this year despite lower gas prices, due to weather conditions and consumers’ desire to save. This has affected department store sales, prompting chains to resort to smaller store models and aggressive discounting.

The last major acquisition in the department store sector was Canadian chain Hudson’s Bay Co, owner of the Lord & Taylor chain, which acquired Saks in 2013 for $2.9 billion. Major department stores like Macy’s and Nordstrom are expected to be contacted by Belk to solicit their interest in a deal. Neither Goldman Sachs, Macy’s nor Nordstrom responded to requests for comment.

Belk operates 297 stores in the southern US and is based in Charlotte, North Carolina.

Source: Reuters.com

CONSUMER SATISFACTION WITH RETAIL IS ON A DECLINE

The American Consumer Satisfaction Index (ACSI) reports that consumer satisfaction with retail is on the decline for the first time in four years.

The ACSI report states brick-and-mortar customer satisfaction fell flat or weakened, while Internet retail is up from last year. By category, overall satisfaction with department and discount stores stayed flat at 77, while the gap between best- and worst-ranked companies grew. Nordstrom was the top rated, gaining 4% to 86. They are followed by Dillard’s (81), Kohl’s (-1% to 80) and Macy’s (79). Walmart dropped 4% to 68 and is at the bottom of the category behind Target (+4% to 80), Meijer (78) and Sears (-5% to 73).

Among home improvement chains, Lowe’s rated best at 81, while Home Depot falls to the category’s bottom dropping 4% to 76.

Amazon remains at the top of the Internet sector, at 86. Netflix improved for the third straight year gaining 3% to 81. Overstock and eBay both dropped to 77 and 79, respectively.

The ACSI is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the US. The ACSI uses data from 70,000 customers annually for measuring satisfaction with more than 230 companies in 47 industries.

Resource: Retailing Today

Nordstrom Rolls On, Loyalty Expands

November 14, 2014

New stores, 3.9% same store sales growth and increased loyalty propelled Nordstrom to record third quarter sales.

The company's total sales increased 8.9% to $3 billion thanks to the addition of new stores and a 3.9% same store sales increase that was driven by online growth.  Profits increased 3.6% to $142 million compared to $137 million while earnings per share increased 5.8% to 73 cents from 69 cents.

The company said sales at full line stores increased 0.5%, reflecting the addition of three new stores during the quarter and flat same store sales.  Nordstrom Rack sales increased 15% thanks to the opening of 16 stores and a 1.7% comp increase.  The greatest growth came from the company's direct business which increased 22% as assortments were expanded.

The Nordstrom Rewards loyalty program continues to contribute to the company's overall results as well.  Members shopped more frequently and spent more on average than non-members.  The company opened approximately 275,000 new accounts in the third quarter, an increase of 18% compared with the prior year.  With 4.2 million active members, sales from members increased 13% in the third quarter and represented 38% of sales compared to 37% the prior year.

The company ended the quarter with 118 full line stores and 167 Rack stores.

Source: Retailing Today.

No Surprises For Nordstrom In Second Quarter

August 14, 2014

Nordstrom's second quarter earnings were in line with its expectations.  The results come two weeks after the company said it was acquiring Trunk Club, a men's personalized clothing service, for $350 million.

Profit for the quarter remained flat compared to last year's second quarter at $183 million.  Net sales for the quarter were $3.3 billion, a 6.2% increase from $3.1 billion in the prior-year quarter.  Comparable sales increased 3.3%.

Nordstrom Rack net sales increased $114 million, or 18%, compared with the same period in fiscal 2013, reflecting incremental volume from existing stores and the impact of 25 store openings since the second quarter of fiscal 2013.  Nordstrom Rack comparable sales increased 4%.

The Nordstrom Rewards loyalty program continues to contribute to overall results, with members shopping more frequently and spending more on average than non-members.  The company opened nearly 370,000 new accounts in the second quarter, an increase of 18% compared with the same period last year.  With 4.1 million active members, sales from members in the second quarter increased 11% in the second quarter and represented 44% of sales, from 42% for the same period last year.

Nordstrom entered into an agreement to acquire Trunk Club July 31.  Founded in 2009, Trunk Club delivers a stylist service that combines the convenience of online with a high-touch, personalized shopping experience.  Trunk Club is a high-growth company and expects to achieve operational profitability and more than double its annual sales to more than $100 million.  The company believes this acquisition represents a natural extension of its core business, aligns with its strategic priorities around a relevant customer experience and accelerates entry into this fast-growing market.

Trunk Club will operate as an independent, wholly owned subsidiary and will be managed by its current leadership.  The transaction is expected to close in the third quarter, subject to closing conditions including customary regulatory and shareholder approvals.

Nordstrom plans to open three full-line stores (The Woodlands, Texas; Calgary, Canada and Jacksonville, Florida) later this year.  To date in fiscal 2014, the company opened 11 Nordstrom Rack stores and plans to open 16 additional stores during the remainder of the year.  In the second quarter of 2014, the company opened a Nordstrom Rack store in Manhasset, New York.

Source: Retailing Today

Rack Rolling For Nordstrom

May 16, 2014

Nordstrom's full line stores saw first quarter same store sales decline but the department store operator's off price Rack division is doing just fine.

Total sales increased 6.8% to $2.8 billion with top-performing categories including accessories, women's shoes, and cosmetics.  A 3.9% overall same store sales increase was comprised of a 1.9% decline at full line stores and a 6.4% comp increase at the rapidly expanding Nordstrom Rack stores.  Nordstrom's direct (e-commerce) sales grew by 33% in the quarter on top of a 25% prior year increase and the company launched its Nordstromrack.com Web site.

Nordstrom said its profits declined to $140 million, or 72 cents a share, from $145 million, or 73 cents a share, due in large part to heavy investments in technology and supply chain to support omnichannel initiatives and entry into Canada.  Despite the decline, the company's earnings of 72 cents were four cents better than analysts expected and above the company's guidance range of 60 cents to 70 cents.

Nordstrom ended the quarter with 117 full line stores, the same as the prior year, while the number of Rack outlets increased to 150 locations from 128.  During the remainder of the year, three new full line stores are expected to open along with 17 Rack stores.

Source: Retailing Today

Nordstrom To Open Online Fulfillment Center

January 21, 2014

Nordstrom plans to open its third fulfillment center at Conewago Industrial Park in Elizabethtown, PA, in summer 2015.  The approximately 672,000 sq. ft. building, with an additional 470,000 sq. ft. mezzanine, will enable faster delivery for Nordstrom.com, Nordstrom mobile app and Nordstrom catalog orders.

In its first three years, the new fulfillment center will offer nearly 400 full-time positions and additional opportunities for part-time and seasonal roles.  In the future, Nordstrom expects to increase hiring - up to 700 full-time roles or more - as business continues to grow.

The new facility joins the company's existing fulfillment centers in Cedar Rapids, IA and San Bernadino, CA.  Nordstrom.com currently serves customers in 98 countries and offers everyday free shipping and free returns within the U.S.  Since 2009, Nordstrom has operated with an integrated inventory platform between its stores and online, as well as the ability to fulfill online orders from any of its 117 full-line stores across the country.

"Speed of delivery is simply just part of our customers' expectations of what good service means today," said Jamie Nordstrom, president of Nordstrom Direct.  "This is an ideal location to add to our fulfillment capabilities and improve the delivery experience for our customers.  E-commerce is the fastest growing area of our business and this is another example of how we're investing in people and capabilities to help us support this growth and responding to our customers' changing definition of service."

"Today's announcement continues Pennsylvania's steady economic progress with another company expanding and more jobs for our citizens," said Governor Tom Corbett.  "It's a testament to why Pennsylvania is built to advance - our keystone location, our talented and hardworking people - all contributed to Nordstrom bringing hundreds of new jobs to Lancaster County."

The fulfillment center is located at Conewago Industrial Park, which is owned by Martin and William Murray, and will be built by H&M company.  Jones Lang LaSalle served as the broker for Nordstrom.  Construction on the project began early this week.

Source: Retailing Today

Nordstrom's Q1 Profits Hurt By Promotions, Shipping; Misses Street

Nordstrom Inc's profit for the first quarter edged up just 2.7% to $149 million, compared with $145 million in the same period last year. Results, which were negatively impacted by free shipping offers and promotional initiatives, met internal expectations, but missed Wall Street estimates.

Sales soared 13.7% to $2.53 billion, but still missed analysts’ forecast of $2.55 billion. Same-store sales rose 8.5%.

Nordstrom has seen strong performance of late, as the luxury category has continued to gain strength, but investments into customer experience initiatives, such as free shipping on all online purchases with no minimum purchase requirement, have squeezed profit margins. The initiatives, however, have had a positive impact on Nordstrom’s e-commerce business, as online sales rose 44.2% in the quarter ended April 28.

Source:  retailingtoday.com

Nordstrom EDI 852 Reporting

If you are a vendor supplying to Nordstrom, you are eligible to receive product sales activity and inventory data via EDI 852. Preparing to setup and receive the EDI 852 files can be confusing, and creating usable reports for your team can be very time consuming. Fortunately, Accelerated Analytics® provides a simple, outsourced service for all your Nordstrom EDI 852 reporting needs.

Using Accelerated Analytics® makes all your reporting headaches go away. With Accelerated Analytics®, we handle all the data conversion, database hosting and reporting. We even provide training and the end user reporting tools. 

Accelerated Analytics® benefits:

• Eliminate manual data entry and manipulation
• Consolidate all Nordstrom store data on all your SKU's into one reporting database
• Pre-built exception reports with color coded dashboards
• No software or hardware to purchase
• Sophisticated charts and graphs

Available reports:

• This weeks sales and inventory by store and SKU
• Last weeks sales and inventory by store and SKU
• This months sales and inventory by store and SKU
• 6 week rolling sales and inventory by store and SKU
• Sell-thru
• Inventory turns
• Days supply on hand

Accelerated Analytics® will give you the ability to anticipate changes in sales and inventory, so you can make adjustments before a costly mistake occurs. 

Positive Signs In Retail

Nordstrom and Lowe’s both reported big increase in profits, and their CEO’s believe the economy is improving, and their sales will continue to improve.

Nordstrom's Profit More Than Doubles
Upscale department-store chain Nordstrom Inc. reported a 152 percent increase in profits during the quarter ended Jan. 30, underscoring how its strategy of expanding price points and carrying more exclusive merchandise is leading to more full-priced selling. The 108-year-old Seattle retailer missed Wall Street's profit expectations by two cents a share on higher expenses and credit card delinquencies. The company's shares fell 3.8% in after-hours trading, to $34.75.  Nordstrom maintained a cautious outlook for 2010, noting that it expects same-store sales to increase between 2% and 4%,

Lowe’s Profits Up 27%
Lowe's Cos. reported a 27% jump in fiscal fourth-quarter earnings amid signs that U.S. consumers are at least starting to consider home-renovation projects again, after more than three years of hesitation. Chief Executive Robert A. Niblock said, the home-improvement retailer's first year-over-year quarterly earnings increase in seven quarters suggests "the worst of the economic cycle is likely behind us." Lowe's expects to see a monthly same-store sales increase during the second quarter—the retailer's peak selling season.

Nordstrom to Spend $45 Million on Tech Upgrades in 2010

Nordstrom recently announced its plans to invest approximately $40 to $45 million in technology upgrades next year, maintaining its level of IT spend year-over-year.

Over the past year, the luxury department store has been heavily focused on evolving its multi-channel business.  This focus has clearly paid off, since the luxury department store most recently reported in its latest quarter that sales for its online Nordstrom Direct business increased 16.4 percent.

The department store also has recently updated its inventory platform, so online orders could be fulfilled from the stores or any Nordstrom location.|

According to Blake Nordstrom, President and Director, Nordstrom, "This continues our ongoing effort to improve our customers' experience by providing them with greater access to more of our inventory whenever and however they want to shop."

Nordstrom continues, "For the customer to go online and be able to leverage the entire inventory throughout the company represents tremendous opportunities. There's significant learnings that are coming from this about our allocation of inventory and, again, our supply chain, but we view it as a real positive and view it as another confirmation on behalf of the customer in the feedback that they're giving us that this multi-channel strategy is super important to our future growth."