We'll confess, we haven't paid close attention to J.C. Penney
(
JCP
) chief Ron Johnson's wardrobe. But as people across the country
swap out summer wardrobes for fall ones, we're going to take a
wild guess that he spent at least some money this year at
Nordstrom's (
JWN
).
The upscale department store is doing well, powering through
the Great Recession far better than J.C. Penney or Macy's (
M
). It's even forging into New York City and Canada.
JWN Revenue Growth
data by
YCharts
What makes Nordstrom work? It has the kind of strategy and
atmosphere that Johnson seems to envy. It manages to stay current
and relevant through smart evolution -- not sudden, alienating
revolution. The value proposition appeals to several generations.
There are moms and dads buying basics and splurge pieces.
Designer Jason Wu, famous for dressing Michelle Obama on
inauguration night, kicked out a line for Target (
TGT
). That sold out in a few hours. But Wu fans willing and able to
pay $2,000 for a dress they'll keep for years can still find that
at Nordstrom's.
It's also appealing to the kids by offering trendier pieces
from the likes of British chip chic chain TopShop, which is
setting up departments in 14 locations this month and will offer
product exclusive to Nordstrom. And if the store's prices are
prohibitive, its discount Nordstrom Rack stores brought in 19.5%
of sales last year - and just shy of 20% last quarter.
JWN Revenue TTM
data by
YCharts
The recession can be tracked in its profit margins.
JWN Profit Margin
data by
YCharts
But when it comes to evolution, the biggest one facing it is
the internet. In 2011 it paid $180 million (plus another $30
million for an earn-out) for HauteLook, a flash sale retailer.
And while it's building and remodeling stores, it's putting
roughly a third of capital expenditures into e-commerce this
year, up from 20% last year.
JWN Capital Expenditures
data by
YCharts
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