Anita

ANITA’S APPAREL

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Nordstrom Philosophy

Anita Lamont, founder and CEO of Anita’s Apparel, a retailer of high-end women’s business apparel, had just opened her fourth retail store in the Midwest. While Lamont was pleased with the company’s progress, she was concerned by the growing number of customer complaints and the low sales per square foot compared to some of her better-known competitors.

When it was just one store that she individually owned and operated, she was able to control most of the details of the business. While she worked with a few employees, she always knew what they were doing. As the number of stores and the size of the stores increased, the number of employees grew more than proportionately. When she was running the single store, she rarely heard a customer complaint, her pilferage costs were very low, and her sales per square foot were $250, compared with $220 today. This concerned Lamont greatly as her expansion plans for Anita’s Apparel had slowed down because the stores were not producing the returns that she expected.

When she opened the second store, she added a store manager at each location. While both managers seemed to be doing well, the number of customer complaints increased. Lamont assumed that this would happen when she had more stores and more customers. By the time that she had opened the fourth store, the number of customer complaints had grown by eight-fold from when there was only one store.

The store managers were also complaining to Lamont because of the high training costs of bringing on new employees. The turnover rate seemed to be very high and Lamont could not understand why. She was paying one of the highest wages in the area to the sales clerks and store managers, yet they were leaving to go work elsewhere. The customers were also complaining about...