Nordstrom bullish on online and outlet business; to double Rack count over next four years
New York — On the heels of a strong performance in 2012 that included a 7.3% same-store sales increase, Nordstrom Inc. is investing heavily in its future. Two big areas of investment: online and expansion of the Nordstrom Rack outlet division, both in the United States and in Canada.
“Rack, direct and Canada will make up approximately half of our sales in the next five years,” Blake Nordstrom, president, Nordstrom Inc., said during the company’s quarterly conference call.
Some 24 new Rack locations are planned for this year, with more than 30 expected in 2014. The company is looking to double its Rack portfolio, from its current 119 locations to more than 230 stores over the next four years.
“Rack’s total sales were up 20% in 2012, with same-store sales up 7.4%,” Nordstrom said. “Its sales productivity, even with the 15 new stores reached its highest level in recent years, over $550 per square foot.”
With regards to Canada, the company said it sees the potential for up to eight to 10 full-line stores and 15 to 20 Rack locations.
Nordstrom will also continue to invest in its direct (online) business and mobile operations. After increasing nearly 30% in 2011, Nordstrom’s direct revenues grew 37% in 2012, generating $1.3 billion in sales.
“It’s our fastest-growing channel and it is expanding our reach to existing and new customers,’ Nordstrom said. “We see substantial opportunities for outside growth to continue as we further improve the online customer experience.”
Over the next five years, Nordstrom plans to double its capital expenditures (relative to the past five years).
“Our current five-year capital plan is $3.7 billion,” CFO Michael Koppel said during the call. “Roughly 20% represents entry into Canada and Manhattan, and approximately 55% is planned for a combination of new full-line stores, Rack stores and remodels. The remaining 25% relates to e-commerce and technology investments, including initiatives to improve our e-commerce delivery and fulfillment, online and mobile experience and personalization.”
Sneak Peak: J.C. Penney’s Joe Fresh shop
New York — J.C. Penney has set a March 15 launch date for the debut of its Joe Fresh in-store shop concept. The Canadian fast-fashion apparel brand will be presented in dedicated shops, ranging from 750 sq. ft. to 2,500 sq. ft., in nearly 700 J.C. Penney stores.
The Joe Fresh collection will focus on modern basics for women, with everything priced under $70, according to J.C. Penney.
“Building Joe Fresh shops inside JCP is a significant milestone because it makes us truly national, and now customers can buy Joe Fresh products online exclusively at JCP.com,” said Joe Mimran, creative director of Joe Fresh. “The ability to broaden our reach reinforces the Joe Fresh brand promise, which is rooted in the belief that everyone deserves fresh style at fresh price.”
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JCP gets a Joe Fresh look
PLANO, Texas — JCPenney announced that Canada’s Joe Fresh brand will launch in JCPenney stores beginning March 15, with a collection of modern basics for women. The collection will be displayed in 750-sq.-ft. to 2,500-sq.-ft. dedicated shops in nearly 700 JCP stores.
JCPenney also said it is rolling out an upscale fancy-dress line, Pearl by Georgina Chapman of Marchesa brand. Created for holiday parties, black-tie events, summer soirees and prom, the collection of gowns and cocktail attire will be priced from $50 to $250. The line will be featured in more than 500 stores on March 1, and presented with upscale fixturing, including an elegant chandelier.
JCPenney’s spring line up of brands also includes L`Amour Nanette LeporeTM, William Rast, LuLu by Lulu GuinnessTM and Duro Olowu. The new fashion lineup will be showcased in the spring marketing campaign that will launch during the Academy Awards on Feb. 24 as part of the company’s 12th consecutive year as the exclusive retail sponsor.
"We want to become famous for irresistible style at incredible value every day," said Ron Johnson, CEO, J.C. Penney. "By introducing these exciting brands at truly affordable prices, we are making it easier for customers to look and live better every day."
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