Nordstrom the Turnaround

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Nordstrom: The Turnaround |

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Summary

Nordstrom began as Wallin & Nordstrom shoe store in 1901. John W. Nordstrom and his partner Carl F. Wallin together combined $5000 to begin the first store on Fourth and Pike in Seattle. Over the next 25 years the store prospered as it moved around from location to location. A second location opened in 1923 but soon thereafter the business began to slow down. Not long after, Nordstrom retired leaving his share of the store to his two sons Everett and Elmer and a short while later Wallin decided to sell his share to the Nordstrom sons. By 1933, the third son Lloyd had also joined in partnership with Everett and Elmer.

Over the years the three sons learned how to share responsibilities in the stores while also sharing leadership titles to assure that all were equally engaged. The brothers started strategically placing shoe stores inside of department stores and by 1963 had started to venture out into women’s apparel. Nordstrom flourished with expansion and by 1971 had over $80 million in sales. The brothers also instituted a profit sharing model to provide employees with a comfortable retirement plan. This treatment of employees instilled loyalty and fostered performance of the store brand. Their long standing policy of fair pricing also spoke to customers as a mainstay of their operating culture and contributed to the performance of the company.

In the late 1960s when it came time for the three brothers to retire, their sons who had been operating the stores for several years brought to them a proposal to keep the stores within the family rather than sell to outsiders, because they said they could do a better job than anyone else in the operations of the business. However, they could not come up with the funding to buy out the three brothers. So, in 1971 the company went public under the management of John McMillan, Robert Bender, and Bruce, John and James Nordstrom, aka. The Five....