Nordstorm Case

Nordstrom Case Write Up

Submit answers to 5 of the following 7 questions below:

1) At what level of store openings or square footage growth do you believe Nordstrom's new store openings should be?

While it favored a strategy of same store growth, Nordstrom was on track to open eight new stores and relocate two more between 2005 and 2008, amounting to a capital commitment of approximately $20 million per store and 2% to 3% square footage expansion per year according to exhibit 11. To me, this level of store openings and square footage growth seem very adequate since they just started to show improved operating results which benefited from their new turnaround strategies and its implementations from 2003. Earnings per share were 2.77 and 1.76 for 2004 and 2003. Those numbers are a lot higher than 2002’s .66. EPS almost tripled between 2002 and 2003 but the pace has been slowed and only to have showed 57% increase in 2004. So, at present (in 2005), Nordstrom has to be conservative about their expansion plan since it is not certain till when they can continue their current momentum but anyhow they

have to seek expansion gradually to deploy their extra cash resources. So, their current plan seems proper for them.

3) Other retailers have experienced significant benefits from the implementation of markdown optimization.  Nordstrom seems to downplay this technology.  If so, what do you conclude from this?

According to the exhibit 10, we can see that Nordstrom has been very active in information technology upgrades. They completed to install and launch perpetual inventory, point of sale, personal book and replenishment system already and are working on vendor ticketing now to complete by 2005. Case is saying that they benefited a lot through these innovative systems. I am not sure if the implementation of markdowns optimization necessarily means information technology but I assume that to answer this question. This technology was not listed in exhibit 10 and...