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1. Browning, E.S., "Indexes Return to Earth
After Dashing Higher," The Wall Street Journal Interactive,
February 12, 2001.
Two years ago, there were more than 100 sites
selling perfumes, cosmetics, and other skin care items. Today, the
number of nationally recognized cosmetics sites is down "in the teens."
Beauty sites are struggling with problems that are also plaguing most online
retailers. Cosmetics company, Estee
Lauder, which can be found in most department stores has wanted to
delve into cyberspace because it didn't want to 
upset
stores that sell its products.
Seattle based Nordstrom Inc. (JWN) maintains
an extensive cosmetics section in its department stores and its web site
is considered a prime candidate for Estee Lauder's e-boutiques. Its
site has a beauty hotline that lets shoppers call or e-mail a personal
shopper who gives advice on selecting make-up colors and other skin-care
questions. The service has become so popular that in the latest site
redesign last June, Nordstrom moved the hotline to a more prominent position,
right on its homepage.
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2. Fornell, Claes, "Report on Customer
Satisfaction," The Wall Street
Journal Interactive, February 20, 2001.
The final quarter showed a small decline in the
American Customer Satisfaction Index (ACSI) compared with the third quarter
of 2000. The overall score dropped .4%. Since customer satisfaction
affects both repeat business and reservation prices, declining satisfaction
puts pressure on profit margins. K-mart
and Nordstrom have
dropped almost 10% since 1994. The industry's average score is 72
and Nordstrom's score is 76, which is not very low at all. The problem
for Nordstrom relates to its fall from a
leadership position in customer satisfaction, coupled with very high customer
expectations. The ACSI data rarely exhibit large differences between
customer expectations and satisfaction, but in Nordstrom's case the expectations
appear to be influenced by a level of service that, according to shoppers,
the company no longer provides. High levels of satisfaction are extremely
important for Nordstrom. As customer satisfaction has declined, so
has its stock performance. Nordstrom is now traded at the same levels
as in early 1996.
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contents
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3. Overdorf, Jason, "Nordstrom Inc. December
Same-Store Sales Fell 2.9%," The
Wall Street Journal Interactive, January 5, 2001.
Due to a sales shortfall and increased markdowns,
Nordstrom
Inc. (JWN) expects to post fourth quarter earnings of 18 cents to 23
cents, which falls well short of the Street's current estimate of 38 cents.
Last year, the company had fourth quarter earnings
of $66.5 billion, or 50 cents a share, on sales of $1.53 billion.
The company said December same-store sales fell 2.9%, while total December
sales rose 5.6% to $736.8 million from $697.6 million in December 1999.
But after adjusting for the differences in the specific days of the week
included in December in the respective years, total December sales rose
6.2% and same-store sales fell 2.9%.
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***
4. "Nordstrom Says Weak Sales, Markdowns
Will Drive Earnings Below Expectations," The
Wall Street Journal Interactive, January 8, 2001.
The upscale retailer, Nordstrom
Inc. said weak sales and increased markdowns would drive fiscal fourth-quarter
earnings as much as 50% below analysts' expectations. Amid a difficult
Christmas season industry-wide, Nordstrom reported a 2.9% drop in December
sales for stores open at least a year, but total sales rose
5.6% from December 1999. The retail clothing chain has been struggling
to reinvent its mix of merchandise and restore its solid sales growth.
Spokeswoman, Brooke White, said, "We're really just not providing the merchandise
our customers want, and we need to do a better job of that." Nordstrom,
at times, has been attempting to change its conservative image to attract
younger shoppers. The chain has been trying to lure them with flashing
lights and funky clothes. As part of this image, Nordstrom has launched
a "Reinvent Yourself" campaign. Their efforts to lure younger shoppers
has only alienated its traditional customer base.
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Contents
***
5. Overdorf, Jason, "Saks Inc. Ends Plans
To Spin Off Saks Fifth Ave. Opers," The
Wall Street Journal Interactive, February 8, 2001.
Saks said it terminated its plans to spin off
Saks
Fifth Avenue, Saks Direct, and Saks Off 5th into a separate public
company due to a change in market conditions that narrowed the difference
in valuations between the traditional department store and luxury retail
sectors. Department store multiples have improved as luxury sector
multiples have fallen. As a result, Saks no longer believes separating
its department store and luxury retail segments would benefit shareholders.
The company still plans to operate the luxury operations, which it calls
Saks Fifth Avenue Enterprises, and its department store group as separate
entities.
The company cited a general slowdown in luxury
retail for the decline in sales at Saks Fifth Avenue Enterprises.
The company expects to achieve moderate comparable store sales growth and
improve gross margins due to merchandising improvements and lower distribution
costs, previously announced office consolidations and other cost-saving
initiatives.
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***
6. Quick, Rebecca, "Steep Discounts Hurt Earnings
But Help Retailers' Inventories," The
Wall Street Journal Interactive, February 9, 2001.
In January retailers had to slash prices in order
to successfully clear out excess winter inventory after a disappointing
holiday shopping season. Although the lower prices will hurt many
retailers' fourth-quarter earnings, most merchants now have healthier outlooks
for the spring season, having gotten rid of old inventory. This year
the traditional January clearance discounts were steeper than ever, leading
to slightly stronger than expected sales and thus, lower than average industry
level at the end of the month. Overall, January same-store sales
rose 3.9% compared with an expected 3% gain.
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Contents
***
7. Egan, Cathleen, "The Pitch: Have
A Coke And A Fashion Statement," The
Wall Street Journal Interactive, February 9, 2001.
Atlanta-based Coca-Cola
Co. (KO), known for its soft drinks, is moving onto the continental
European fashion
scene and soon the U.S. Coke is offering a trendy collection of halter
tops, skirts, vests, dungarees, and nearly 180 other casual and sportswear
item with nary a "Coke" or "Coca-Cola" on them. Called Coca-Cola
Ware, the collection has lasted four seasons in London and its unexpected
success has prompted a rollout to the rest of Europe. The challenge
in the U.S., however, is where to sell the line. In Europe, Coke
Ware will be sold through trendy, stand-alone-type shops called independents,
but the U.S. doesn't have many of these kinds of stores. The big
question is why anyone would want to wear clothing backed by a soft drink
manufacturer, but apparently the buzz has been far greater than Coke ever
imagined. Part of the acceptance of the collection may be that the
clothes are not promotional. The line is based on fashion principles
rather than promotional purposes and is being marketed as its own brand,
not as an extension of Coke's soft drink business.
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to Table of Contents
***
8. Coleman, Calmetta, "Kohl's Unique Racetrack
Layout Helps Squeeze Out High Sales Per Square Foot," The
Wall Street Journal Interactive, March 1, 2001.
Kohl's
Corp. has been running circles around its retail rivals due in large
part to its racetrack store design. While most retailers had a disappointing
Christmas, the Midwestern discount department store chain racked up a same-store
sales gain of nearly 15% in December. Shoppers like Kohl's for its
low prices and national brands, but a key part of the success formula is
its unique store design. Modeled after a racetrack, the Kohl's store
layout is smaller and simpler than those of most department stores.
Its design is geared to smoothly lead shoppers past all of the merchandise,
in what the retailer hopes is a continuous circuit of temptation. The layout
has helped Kohl's squeeze out surprisingly high sales per square foot among
its department store peers.
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Contents
**
9. "May Department Stores Agrees To Buy Nine
Stores From Saks," The Wall
Street Journal Interactive, January 31, 2001.
May
Department Stores Co. said it agreed to buy nine Southeast department
stores from Saks
Inc. for $309 million. As part of the deal, May is acquiring
the stores' inventories and customer account receivables. The nine
stores, which generate annual revenue of about $210 million, included five
Proffitt's stores in Nashville, Tenn.; three Parisian stores in Louisiana
and Florida, and a McRae's store in Baton Rouge, La. Saks acquired
the nine stores in 1998 from retailer Dillard's
Inc. Saks is disposing of the stores because they aren't meeting
their investment-return criteria. Saks said it will use proceeds
of the sale, which it plans to compete in March, to reduce debt and repurchase
some shares.
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Contents
**
10. "Halogen (Nordstrom)," Chain
Store Age, February 1, 2001.
Nordstrom
Inc. takes on a new attitude with Halogen, its fashion-forward brand
in men's and women's apparel. The 1,00 square foot in-store Halogen
shop is designed to define the brand. A modular pavilion made up
of translucent panels, wall-mounted video monitors and display units and
feature walls, it conveys a strong fashion 
message.
The simple, minimalist presentation, characterized by neat stacks arranged
by color, gives the space an ultramodern look. The materials, which
include brushed aluminum fixturing and Plexiglas surfaces, add to the effect.
Simple, geometric forms provide a clean backdrop for the merchandise while
alerting customers to the shop entrance. The modular fixtures and
furniture allow for frequent changeouts while reinforcing the shop's modern
sensibility.
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Contents
**
11. "Retail Sales Climbed 0.7% in January As
Consumers Hit Post-Holiday Sales," The
Wall Street Journal Interactive, February 13, 2001.
Retailers won a January reprieve from recent sales
slumps as buyers snapped up building supplies, home furnishings, clothes,
and cars. But the gain could only be temporary. Lured into stores
by deep discounts and better weather, Americans pushed up sales at the
nation's retailers in January by a strong 0.7%, the biggest jump in four
months. The advance followed a modest 0.1% gain in December, when
lackluster holiday spending disappointed many retailers.
Stronger
retail sales could be a signal that consumer confidence is recovering after
taking a downturn amid harsh winter weather and concerns that the overall
economy is weakening. Retail sales have been lackluster over the
last several months as the economy has slowed sharply. To cope with
the economic slowdown, some of the nation's biggest chainstores, including
Sears
Roebuck and Co. and J.C.
Penney Co., announced store closings.
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to Table of Contents
**
12. "Nordstrom Rack to Open in Nevada,"
DSN
Retailing Today, February 16, 2001.
Nordstrom
Inc. announced it will open a Nordstrom Rack store at Silverado Ranch
Plaza in Hendersen, Nevada. Nordstrom Rack, the off-price retail
division of Nordstrom Inc., is scheduled to open its 30,000 square foot
store in fall 2001.
Nordstrom Rack offers clearance merchandise transferred from Nordstrom
full-line store and Nordstrom.com. Other merchants who have signed
on to the Silverado Ranch Plaza project include Target,
Marshalls,
Michaels,
and Krispy Kreme.
Nordstrom also plans to open a full-line store in fall 2002 at Fashion
Show Mall on the Las Vegas strip.
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Contents
**
13. Laise, Eleanor, "Street Smart-
The Price Is Still Right: While A Cooling Economy May Hurt Earnings
Growth At Some Retailers, This Blue-Light Specialist Thinks," The
Wall Street Journal Interactive, February 20, 2001.
Shari
Schwartzman Eberts takes an analytical approach to each company she covers,
focusing on earnings growth and valuation. She also looks for a strong
management team, which she says is key to any successful retailer.
Eberts has her eye on Federated
Department Stores which she believes is "trading at a very attractive
valuation relative to historical averages." May
Department Stores is another favorite. It will have strong earnings
momentum relative to its peers this year. Eberts says Wal-mart
and Target are "good
stocks you'd want to own for the long-term," but at current valuations,
they're simply too expensive. 
As for Nordstrom,
Eberts sees tough times ahead for Nordstrom. She thinks that Nordstrom
has a great franchise and a great brand name, but they're undertaking so
many different initiatives. The company is expanding into the South
and the Midwest and adjusting to a new management team. She expects
to see some execution missteps this year which would be negative for the
stock.
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Contents
**
14. Zimmerman, Ann, "Walmart.com Cuts 25
Jobs, But Expands Some Departments," The
Wall Street Journal Interactive, February 28, 2001.
Walmart.com
said it is laying off 25 employees in merchandising and marketing, but
adding 52 engineering, design, and product-management positions in an effort
to better allocate resources. Coming out of the holiday season, they
learned what customers wanted and didn't want and decided they shouldn't
be investing resources in the parts of the business people weren't interested
in. For example, baby clothes didn't sell well because customers
felt the retail 
value
wasn't high enough to warrant paying the shipping costs. The company
will focus instead on more profitable and popular items, such as electronics,
and also plans to improve the site's engineering and design. In the
second half of the year, Walmart.com said it plans to launch an Internet-service
provider with AOL
Time Warner Inc., a deal that has been in the works for more than a
year, but was held up by the merger of AOL and Time Warner Inc.
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*
15. "Analysts Think Fed Will Cut Rates
Again; Retailers Have Disappointing Holiday Sales," The
Wall Street Journal Interactive, January 7, 2001.
The Federal Reserve unexpectedly announced a cut
in interest rates amid growing signs that the economy was slowing more
than expected. Big retailers posted 
disappointing
same-store sales for December. Wal-Mart
Stores said sales were little changed from a year earlier, while Sears
Roebuck reported falling sales and said it would close 89 stores. Nordstrom,
Limited,
Circuit
City,
Federated
Department Stores and others also had disappointing results.
Many blamed the weather and the slowing economy.
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Contents
