The Nordstrom Store

"I will never forget that first day", wrote John Nordström of the opening day of the Wallin & Nordstrom shoestore in 1901. "I had never fitted a pair of shoes or sold anything in my life, but I was depending on Mr Wallin's meager knowledge of shoe salesmanship to help me out. Well, this opening day we had not had a customer by noon, so my partner went to lunch. He had not been gone but a few minutes when our first customer, a woman, came in for a pair of shoes she had seen in the window. I was nervous and could not find the style she had picked out in our stock. I was just about ready to give up when I decided to try on the pair from the window, the only pair we had of that style. I'll never know if it was the right size but the customer bought them anyway".

The first days total sales amounted to twelve dollars and fifty cents. Last year John's grandchildren had net sales exceeding 1,6 billion. Nordstrom Inc. with it's 46 stores is now the largest independently-owned fashion specialty store chain in the U.S. With a base in the Pacific Northwest, Nordstrom has expanded dramatically into California, where there are now 18 stores.
In March 1988 Nordstrom will open the first East Coast store in Tysons Corner (Washington, D.C.). to be followed by another one in Pentagon City (Washington, D.C.) This will be the first time it will face direct competition within a shopping center, from Sak's Fifth Avenue, one of the stores (along with Bloomingdales and I Magnin) that Nordstrom is often compared with. Judging by past performance, Nordstrom is bound to win and continue the expansion. Denver, Dallas, Kansas City and St. Louis are likely candidates for new stores or to quote the 1986 Annual Report:"In addition we are looking for another Midwest or East Coast market area for the Company. Our larger stores in highly populated markets come up to high volume levels quickly, and we feel they provide the greatest opportunities for our shareholders and employees."

John Nordstrom's philosophy to "offer the customer the best service, selection, quality and value" is still very much in evidence. A lady with size 44 in shoes should have no problem with choice and if you happen to need a whole new wardrobe for a trip, the "Personal Touch" complimentary shopping service can coordinate it for you. If you are looking for something classical Nordstrom hasn't got, the tailors will make it for you. Now Nordstrom has also started it's own production of certain items to make sure these are of the same high quality evident throughout the store.
The founder defined the Nordstrom look as "clothes that should not produce an audible comment but rather silent approval as the wearer enters the room". This means well-made, not too trendy fashions for the upwardly mobile middle-class. Entering the classy, modern-looking stores to the sound of live piano music, you get a feeling of security and stability - a "just right" sense that has appealed both to the yuppies and the traditional carriage trade.

What sets Nordstrom apart from other stores entertaining the same segment, is the tradition of decentralisation. Every region makes its own decisions and orders its own merchandise. This independence coupled with commissions to salespersons, has made Nordstrom's customer service outstanding. Employees are better motivated than the competition's which means they really listen to their customers.

The present co-chairman of the company, John Nordstrom, remembers his grandfather as someone "who loved shoes". Long after his three sons had taken over the business, the founder would linger in the Fifth and Pike store's shoe department - the largest shoe department in the whole country. Here he would meet with old Swedish friends and walk around, looking like a clerk. He continued to do this until he was well over 80. More than once customers are known to have commented "I know these Nordstrom boys are loyal to their employees, but I can't under
stand why they keep working that old man".

Before he died the original John Nordstrom wrote his memoirs. "I am writing this for my grandchildren to read after I am gone, to let them know what the average immigrant had to go through in the 1880's".

He was born on a small farm in Alvik in Neder Luleå and arrived, only 16 years old to Ellis Island with five dollars in his pocket and not a word of English in his vocabulary. He was unhappy with his hard life in Lulei, but the logging and mining jobs he now got, were if anything, even harder to cope with. John Nordstrom's big break came with the 1896 Klondike Gold Rush.

After losing money on non-producing stakes, John finally bought a proven gold claim together with two investors. The claim netted more than five million dollars, but not for Nordstrom and his partners who were forced to sell out because of some very doubtful lawsuits questioning their ownership. In the end Nordström made 13 000 dollars out of the deal, part of which became his investment in the shoe store, that he set up with partner Wallin.

John Nordstrom had three sons, Everett, Elmer and Lloyd, who all started early in the shoe business. In 1928 John Nordstrom sold his share of the business to his older sons, then only 24 and 26 years old. A year later Wallin, who only had a daughter, sold out too. In 1933, the third brother Lloyd joined the business. It was in the midst of the Depression and the shoe store had no net worth. The brothers survived the Depression and the war and slowly built up the company into a 27-unit operation with annual sales of 12 million dollars by 1963.

The brothers practised a rather unique teamwork. They rotated the titles on a t---vent basis. "We would work our way to president,, then drop down to secretary/treasurer for two years. Then we would serve as vice president for two years, until we became president again".

When the third generation felt ready to run the company, the second generation brothers had their doubts. They were originally intent on selling Nordstrom to an outsider but changed their mind.

The director and president today is James Nordstrom, co-chairmen are cousins John and Bruce Nordstrom. Other members of the inner group -"The Five" are Nordstrom son-in-law John McMillan and long-time family friend Robert Bender. The five serve as general managers for each overall category of merchandise, although the decentralised structure stresses initiatives on regional levels. When The Five want to retire, the numerous members of the fourth generation of the family will no doubt volunteer to take over.

The Nordstrom family has kept up its links with Sweden. Grandson John has just returned from a trip to the old country. His father Elmer married the daughter of Dr N.A. Johanson, the founder of the Swedish Hospital in Seattle. When Elmer retired from the dayto-day running of the store, he became President of the hospital in 1945. By the time he retired as an active board member of the hospital, this complex stretched over nine blocks and had become the largest hospital in the Northwest. It also had an addition called the Nordstrom Tower.

Shortly before his death, John Nordstrom wrote "It is hard for me to believe that the little business I started with Mr Wallin sixty-one years ago could grow to its present size. But, more satisfying is the fact that I am here to watch the third generation of our family in the process of taking over the management of this business and doing it so well."

Campany File

Nordstrom is a contemporary fashion retailer operating 37 large, 8 smaller, and 8 clearance stores in Washington, Oregon, Alaska, California, Utah and Montana (plus leased shoe departments in Hawaii).

The company sells quality merchandise in primarily medium to higher price ranges. The company's sales for 1986 exceeded 1,6 billion. Nordstrom has been clocked for the highest inventory value per square foot of any specialty apparel retailer in the country, the highest sales per square foot, the highest profit per sale and one of the highest inventory turnover rates - three times the national average.

Shoes represent 19% of sales, women's apparel 41%, women's accessories 18%, men's apparel 16% and children's apparel and accessories 4%. Net earnings rose by more than 45% last year.

The family still controls 55% of Nordstrom, making it the largest independently owned fashion specialty store in the U.S.