Nordstrom on Wednesday said it plans to close a full-line store at Salem Center in Salem, OR. The store, which has been open for nearly 40 years, will serve customers through April 6, according to a company press release.
The closure will impact about 130 non-seasonal employees and Nordstrom is working with each to determine their next steps, the company said. Nordstrom will continue to serve Oregon customers online and at three other Nordstrom stores and six Nordstrom Rack stores throughout the state.
Nordstrom — unlike Macy’s, Bon-Ton or other department stores — has a fairly rational physical footprint, but that doesn’t mean it can escape the need to close underperforming stores. Nordstrom stores President Jamie Nordstrom in a statement on Wednesday, noted that the company is looking "for opportunities to grow our business and ensure we’re meeting the needs of our customers." He emphasized that physical stores have been, and will continue to be, an essential part of the company’s ability to serve customers.
The company's net sales rose 2.5% and same-store sales increased 1.2% for the nine holiday weeks of November and December ended Dec. 30. The gains reflect an improvement in both Nordstrom full-line and off-price Nordstrom Rack stores, as well as growth in e-commerce at Nordstrom.com and Nordstromrack.com/HauteLook.
"As we look for opportunities to grow our business and ensure we’re meeting the needs of our customers, we have to make decisions about where to invest our resources," he said. "Unfortunately, we don’t think investing in Salem Center is the best approach for us moving forward."
In order to rise above the challenges faced by department stores, including changing consumer behavior and expectations, Nordstrom also continues to experiment with various retail structures including pop-up spaces and a merchandise-free concept store in West Hollywood, CA. The company has also invested in cutting-edge retail concepts.
"Nordstrom purchased HauteLook and Trunk Club and has made a ton of investments — in Shoes of Prey, for example," Maya Mikhailov, co-founder and chief marketing officer of GPShopper, told Retail Dive last year. "They’re looking at a different M&A strategy altogether, of placing strategic bets across the board. Nordstrom is experimenting in emerging business models, which is very smart because it allows them to stay on the cusp of these trends and to see what works. They’re saying 'I don’t know if there’s a market here, but I’m willing to see if the consumer will adopt this and if we can bring this to mass market.'"
The company would have even more freedom to experiment out of the glare of Wall Street, which may be prompting members of the Nordstrom family to explore the idea. It was announced in June that they were considering taking the company private, though at the time had filed no proposals and made no promises. A private restructuring would likely take Nordstrom three to five years, Howard Davidowitz, chairman of New York City-based retail consulting and investment banking firm Davidowitz & Associates, told Retail Dive last year when the idea first surfaced.
By late July, the family group was negotiating with potential private equity partners for a possible deal. In mid-October however, they notified a special committee of the board that they had "suspended active exploration, for the balance of the year" and would resume their exploration after the holiday season wrapped up. A spokesperson for the group didn't immediately respond to Retail Dive's request Thursday for an update.
The underlying reasons for such a deal remain, though. Davidowitz believes that Nordstrom is "brilliantly" positioned to go private because of the loyalty of their customers, their commitment to customer service, the Nordstrom Rack business (established more than four decades ago) and their "very powerful" online business.