Nordstrom Financial Analysis Essay example

5474 Words Nov 21st, 2011 22 Pages
Executive Summary
This report examines the value of Nordstrom Inc. stock and offers existing shareholders and prospective shareholders an insight into the value of the company. The purpose of this report is to provide potential shareholders with information as to why they should buy into the company and existing shareholders with information as to why they should hold their stock.

Since Nordstrom opened, the company has achieved critical acclaim for outstanding customer service and inventory selection. Sales have always been on the rise with the exception of a slight dip after the economic recession, but were quickly regained with the expansion of Nordstrom Rack stores. To exemplify this, the company report is divided into four
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Through the 70’s the company continued to grow. In 1974 annual sales hit $130 million. By 1980 Nordstrom was the third largest specialty retailer in the country. Sales hit $407 million and in the next few years, sales continued to rise. Nordstrom’s success was due to many factors. Shoes accounted for about 18 percent of total sales. In addition Nordstrom consistently maintained huge inventories and selection, which were usually twice the size of other department stores. Anchor malls seek the company, as a cornerstone of downtown renovation projects or as an added jewel for high end shopping customers. By being able to expand not only by adding locations, but also by expanding merchandise sold, Nordstrom became a dominant force in the industry and strengthened their market share position.
Inventory
Expansion was not the only change Nordstrom implemented to differentiate the company from competitors. By broadening their inventory selection and making it more accessible to their customer base, Nordstrom began setting the bar for all retailers in the industry. With the additions of departments such as juniors and sportswear they began to expand and increase their target market to a younger customer. In the 80’s, Nordstrom modernization continued by adding women and men’s vendors such as Calson, DKNY, Kenneth Cole, and Tommy Bahamma. In May 2000, Nordstrom declared “Reinvent Yourself”
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