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SEATTLE — Nordstrom Inc. executives chose two footwear vendors — Jimmy Choo and Ugg Australia — to receive the fashion retailer’s Partner in Excellence award this year, a symbolic selection announced last week at its annual shareholders meeting here.
Footwear is at the core of Nordstrom’s corporate culture, president Blake Nordstrom told investors, recounting the fashion retailer’s start in 1901 as a Seattle shoe store — where executives say the retailer’s well-known, dogged focus on customer service began.
“I submit that those qualities and values of being on your hands and knees as a shoe merchant apply today,” said Nordstrom, in outlining the company’s recession-survival strategy that includes trimming as much as $200 million in expenses this year.
The retailer also has cut prices an average of 10 percent as part of a top-to-bottom edit of merchandise. Additionally, the company has reduced inventory by 12 percent per square foot from a year earlier, which is in line with sales that, for 2009, are expected to decline 10 to 15 percent on a comparable-store basis. Last year, same-store sales decreased 9 percent.
But there are bright spots in Nordstrom’s business, including sales of Jimmy Choo footwear and handbags, which increased 600 percent at Nordstrom between 2005 and 2008.
At Nordstrom’s annual meeting, Jimmy Choo’s CEO Josh Schulman praised the department store’s position in the luxe marketplace. “For 15 years I’ve been telling anybody who will listen that Nordstrom has a unique ability to speak to the customer about fashion and a unique ability to speak to the luxury customer,” Schulman said.
Ugg is another standout at Nordstrom, as the retailer’s best-selling vendor and a two-time recipient of the Partner award. Peter
Nordstrom, president of merchandising, told investors that 1 million pairs of Uggs were sold in November and December alone across the company’s 111 full-line stores and Website. In December, Ugg volume translated into 22,000 pairs per day, 1,800 per hour and 30 per minute.
Jack Minuk, EVP and GMM of shoes, praised Choo and Ugg executives for being collaborative and opening “lines of communication that continue to produce outstanding results.”
In the business as a whole, other pockets of strength have been the company’s 61 Nordstrom Rack outlets, which for the first quarter of this year saw same-store sales increase 1.2 percent. Last year, Rack comps gained 3.1 percent, in contrast to a 16.5 percent decline for full-line stores.
With the soft economy, outlet stores are the focus of expansion plans, with eight stores slated to open this year, including one in Manhattan’s Union Square. For several years, Nordstrom has been actively looking to locate a full-line store in New York.
Meanwhile, footwear last year comprised 21 percent of Nordstrom’s net sales, or $1.72 billion, a 3.5 percent decline against 2007.