Nordstrom to close 16 stores post COVID

Predicting the demise of Sears & Kmart since 2017!
storewanderer
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Re: Nordstrom to close 16 stores post COVID

Post by storewanderer »

buckguy wrote: May 20th, 2020, 10:47 am The clearance merchandise is a function of their gradually closing the clearance centers which were conversions of underperforming stores. They're doing more markdowns than in the past and they distribute coupons online. I haven't bought anything from them recently (like I said nothing of any particular distinction) but do like to do amateur anthropology when I'm in their area. The service really tends to be non-existent even in their more upscale stores. The displays vary a lot from disheveled to fairly neat---they seem to get better for awhile after they update stores (which they've been slow to do). OTOH, they seem to have less merchandise on the floor than in the past. The clientele is older which is probably part of their downward spiral. They also don't attract families, which is something that JCPenney still manages to do.

The real issues with them are that the owners are sucking cash out of the chain and it's losing money, so it's pretty unlikely they will move anywhere.
I've never seen disheveled displays in a Dillards other than on New Year's Day during that storewide clearance sale when everything is everywhere since the store is so crowded with customers. On a normal day the shelves are orderly and in the case of men's items like dress shirts, polo shirts, etc. are even arranged in nice color order. I have observed this condition in multiple Dillards in NV, OK, UT, and AZ. The one in Stockton, CA could use some deep cleaning around the corners but is still a neat and well kept store (as good as an above average Macy's).

I'm not aware of any coupons they issue for their physical stores other than connected to their credit card after you spend a certain amount they will send a coupon you can take to the store and use. They don't issue any in-store % off coupons or $10 off $50 coupons or anything of that nature. Not sure if they do coupon codes for the website; it is so bad, it isn't worth the frustration.

We will see what happens in a year and where things are at with these chains. We will see who has closed the fewest stores. I expect it will be Dillards.
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Re: Nordstrom to close 16 stores post COVID

Post by buckguy »

Perhaps Dillard keeps their stores neater out-West. I've seen pathetic ones in the South and Midwest. The markdowns and promotions are notable enough that the business press has described/commented on them.

They had a poor Christmas season and, of course, a poor first quarter yet they have continued to buy back stock. They talk about "right sizing" of their business which seems to mean that they are just accepting a long term shrinkage of their operation.
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Re: Nordstrom to close 16 stores post COVID

Post by storewanderer »

buckguy wrote: June 4th, 2020, 7:28 pm Perhaps Dillard keeps their stores neater out-West. I've seen pathetic ones in the South and Midwest. The markdowns and promotions are notable enough that the business press has described/commented on them.

They had a poor Christmas season and, of course, a poor first quarter yet they have continued to buy back stock. They talk about "right sizing" of their business which seems to mean that they are just accepting a long term shrinkage of their operation.
The business press seems to have a full court press out there cheering on the demise of the department store business looking for any negative they can find (pretty easy thing to do though). Sears served as their hot topic for decades, JCP to a lesser extent, and more recently they seem to be going after Macy's and a little bit on Dillards.

Dillards same store sales in Q4 fell 4% and Macy's in Q4 fell about 0.5%. However when you look at how many store Macys closed and how much business from closed stores may have shifted to open stores, I am not sure how good that is. Plus Macys had a lousy Q4 in 2018 with same store sales down over 3% while Dillards Q4 in 2018 had a 2% increase in same store sales so really the performance of the two on same store sales seems to be like a ping pong ball having a rather similar net result.

Dillards right sizing comment referred to the industry as a whole.
https://investor.dillards.com/press-rel ... fault.aspx
"Dillard’s Chief Executive Officer William T. Dillard, II, stated, "A weak top line weighed heavily on the bottom line in the fourth quarter. However, we achieved a consecutive 4% decline in inventory while maintaining a flat gross margin rate. As U.S. department store retailing continues to right size, our conservative financial approach supports our long-term view. We continue to focus on improving our results and on shareholder return." "

Dillards does not do even 1/4 the markdowns JCP, Macy's, and Kohl's do where it is literally almost every item on sale all the time. Ultimately Dillards marks the stuff down when they clearance it (33% off then 50% off then 65% off supplemented with those couple weekends a year extra 40-50% off markdown prices sales) just not every single day they are running the store. Nordstrom does far fewer markdowns still.

How many malls do Dillards and Nordstrom cross in? It seems like they do not cross each other very often...

I would argue both are much more like an "old line" department store than the others who keep trying to change with the times (Macy's- and we see where that gets them).

I really think the two chains have an entirely different customer/merchandise type model. Yet in a number of ways the two chains are quite similar. Still controlled by family. Own much of their own real estate. Still run the old department store model (departments are staffed with registers, not centralized cashwraps) with employees financially accountable for how much product they sell (Nordstrom on a commission model, Dillards basing pay rates on meeting various "sales goals"). Nordstrom does not own nearly as much real estate as Dillards owns, but it would not surprise me if the real estate Nordstrom does own is materially more valuable per parcel based on their locations.
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