Nordstrom's solid December showing suggests some shoppers eager to spend
Nordstrom's online division posted strong sales growth in December. Investors reward Seattle retailer.
Seattle Times business reporters
Nordstrom, which struggled as much as many retailers a year ago, has emerged as a winner of the 2009 holiday-sales season, a sign that shoppers felt a bit better about splurging on new shoes and clothes.
The Seattle-based retailer said Thursday that sales at stores open at least a year rose 7.4 percent for the crucial month of December, crushing Wall Street's forecast of a 2.5 percent increase.
Nordstrom shares surged to a new 52-week high as the company also said it expects to beat its previous fiscal 2009 projection for a per-share profit of $1.83 to $1.88.
Its stock closed up $1.50, or 4 percent, to $38.93, a level not surpassed since February 2008.
A year ago, Nordstrom posted a 10.6 percent decline in December same-store sales, so the bar for last month was set pretty low.
"Certainly, happy days are not here again, but we don't need to be singing a funeral dirge anymore," said retail analyst Patty Edwards, founder of the Bellevue investment-management firm Storehouse Partners.
Same-store sales, or sales at stores open at least a year, are considered a key gauge of retailer performance because they exclude growth from new outlets.
Retailers as varied as Costco Wholesale and Neiman Marcus showed healthy year-over-year improvement.
At Issaquah-based Costco, the key measure rose 9 percent, partly because of higher gasoline prices. Analysts polled by Thomson Reuters expected a 7.9 percent gain.
Costco's stock closed Thursday down 29 cents, or less than 1 percent, to $59.71.
Although high unemployment continues to weigh on shoppers' minds, a stock-market rebound has been a boost to retailers with an affluent customer base, Edwards said.
Neiman Marcus, which a year ago posted a December same-store sales decline of 27.5 percent, had a 4.5 percent gain.
Saks reported a 9.9 percent jump as it moved a designer-clearance event from November to December, beating analysts' prediction for a 2.8 percent increase.
And Macy's, which raised its quarterly profit outlook after seeing its same-store sales rise 1 percent, cited strength at its upscale Bloomingdale's division.
"The affluent customer is out of panic mode," Edwards said. "They can loosen the grip on the pocketbook a little bit."
After 16 straight months of declining same-store sales, Nordstrom began to turn things around in October, with a 6.5 percent jump, then a 2.2 percent gain in November. Same-store sales for each of those months in 2008 plunged nearly 16 percent amid a worldwide credit crisis.
Only moderately priced Kohl's, of Menomonee Falls, Wis., boasts a better run among publicly traded department stores. Kohl's reported a 4.7 percent increase for December, its sixth consecutive month of same-store sales growth.
Wal-Mart does not release monthly store sales.
December sales at Nordstrom's established full-line clothing stores rose 5.1 percent from a year ago, nearly matching a 5.2 percent increase at its off-price Rack division. The direct division, which includes its Web site, remained a bright spot, up 30.1 percent.
Nordstrom's reputation for strong customer service, as well as spot on merchandising of boots, jewelry and women's clothing, attracted shoppers, said Jennifer Black, a Lake Oswego, Ore., retail analyst who advises large institutional investors.
She thinks Nordstrom's handling of customer returns, which she describes as "no questions asked," gives it an edge in tough times. During the financial-sector meltdown of late 2008, she said, "people looked in their closets for anything with the tags still on."
"Nordstrom took all of it back, and those customers will never forget that," she said. "If there has ever been a period to find out what retailers to trust, this has been it."
Longtime Nordstrom customer Kristin Affolter said she did much of her Christmas shopping during the retailer's Anniversary Sale last summer. "I bought everybody jackets and shoes," said Affolter, a mother of two who lives in Seattle.
The event's price cuts weren't the only thing that attracted her, she said.
"Part of it is knowing that my family can take back something I bought there six months ago, and no questions asked," she said.
— Amy MartinezTidbits
Millstream gift shop has moved from Westlake Center in downtown Seattle to its former space in Pioneer Square and is under new ownership. New Year's Eve was the last day of work for founder Roger Fredericksen, who said he was thrilled to sell the business to "the right people."
The new owners are Chereyl Spink and Fred Johnson, who have a combined 50 years' experience at Nordstrom, Fireworks, Made in Washington and the Museum Company. They initially did not realize that their new space for Millstream, at 112 First Ave. S., had been home to the nature-oriented gift shop for 14 years before its move to Westlake about eight years ago.
"What's so heartwarming for us is the local people who walk in the door and say, 'Oooh, Millstream's back!" Spink said. — MA
Hard Rock Cafe is hiring for a two-story location with a "rustic refined" design, to open next month at 116 Pike St. It needs 140 servers, bartenders, bussers, cooks, hosts and retail associates. A job fair will be from 9 a.m. to 7 p.m. Monday through Jan. 16 at the 415 Westlake Building on Westlake Avenue North. Applicants must be 19 and older and have a government-issued ID. — MA
Brother and sister Rob and Tammy Armijo plan to open PNK Restaurant & Ultra Lounge, serving Latin-fusion food, in April at Pacific Place in downtown Seattle. It will take the place of Todai on the fourth level. The Armijos owned and operated three lounges in the Denver area before moving to the Northwest. — AM
Retail Report appears Fridays. Amy Martinez covers goods, services and online retail. She can be reached at 206-464-2923 or firstname.lastname@example.org. Melissa Allison covers the food and beverage industry. She can be reached at 206-464-3312 or email@example.com.
About Retail Report
Retail Report is a look at the trends, issues and people who makeup the dynamic and versatile retail sector throughout the Puget Sound region. Every Friday with Melissa Allison and Amy Martinez. Send tips or comments to firstname.lastname@example.org or email@example.com.