Nordstrom Must Change Its CEO

My admiration of Nordstrom
goes back some 20 or 30 years. I admired how Mr. Bruce (Nordstrom) ran the company, how associates cared for their customers in many ways, and how the late Blake Nordstrom communicated his vision and steered the company to greater successes.

Times have changed. A terrible crisis was created by COVID-19, and current president Erik Nordstrom (59) has tried to meet the challenges in his stores. He has failed despite the support his management team has given him. Sadly, the results leave Nordstrom is a weakened state. Frankly, at this critical time, a change is in order.

In a family-run business, it is hard to make leadership changes, but the strength of each member should be measured and evaluated. The true merchant at Nordstrom is Peter Nordstrom (61), a merchant who understands both the timing of fashion and the need to create fresh fashion messages. He also understands the need to be lean and clean of old-season merchandise in order to introduce new fashion. The company should recognize the importance of such merchant expertise and surround Pete with strong people who will look after stores. It would be a salutary change to have him lead the company.

Recently, activist investor Ryan Cohen is said to want to make changes to the Nordstrom board following a steep stock price decline; this according to the Wall Street Journal. Specifically, Mr. Cohen seeks to remove a board member who was recently CEO of Bed Bath and Beyond. There is no disagreement that Mr. Cohen believes that Mr. Mark Tritton’s failure at Bed Bath & Beyond
leaves many questions unanswered about a role for him framing a successful future for Nordstrom. Nordstrom shareholders will vote on a new board at the annual meeting and thus can take appropriate action at that time.

The Nordstrom headquarter store in New York City was conceived by Blake Nordstrom and is led by a team of dedicated associates. However, the store has not met its sales targets and languishes on 57th Street as an alternative to Bloomingdale’s Saks Fifth Ave, and Macy’s. There have been no fashion shows, no trunk shows nor any special events to make a trip to the store worthwhile.

Recently management indicated that it will open more Rack stores. It is the first time that there is a glimmer of recognition that customers like to shop in Rack stores, that they like the assortment of apparel and shoes at discount prices, and that The Rack is a valuable addition to the chain. The stores are clean and attractive and speak to the Nordstrom customer.

As noted above, to make a change in a family business is difficult; everybody has to agree to the changes that will permanently change the character of the company and potentially impact family relationships as well. Many of the traditions will remain the same, but a new CEO with a vision for future growth and future development can change the momentum of sales and create greater awareness of the message he or she wants to impart.

POSTSCRIPT: This is a hard message to report about a company that we basically love. The people at Nordstrom are friendly and warm, and they care about their company. There is a lot of pride among those who work for the Seattle based company. But, changes must be made to restore this respected brand, and we reflect on these changes.

#Nordstrom #Change #CEO

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