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The Nordstrom Touch

Blake, Erik and Pete Nordstrom, José Mandojana

How retail’s humblest dynasty—led by Blake, Erik and Pete Nordstrom—is seizing the future of shopping.

On the cover: The Nordstrom brothers photographed in Vancouver by José Madojana.

Employees call the 82-year-old retail veteran “Mr. Bruce,” partly because “Mr. Nordstrom” isn’t specific enough. There are a lot of Mr. Nordstroms at corporate headquarters above the flagship store in downtown Seattle. Chief among them are Bruce Nordstrom’s three sons, Blake, Pete and Erik, who are the fourth generation to run the family’s 114-year-old retail dynasty.

Bruce Nordstrom retired nine years ago, but still he shows up every day, walking to work and frequently lunching at Nordstrom’s new cocktail lounge, Habitant, where he enjoys an Arnold Palmer and a smoked salmon crostini. Shortly after lunchtime on a Monday in October, Bruce—wearing a plaid button-down, khakis and a broad smile—stopped by Blake’s office and handed his eldest son a black MAC cosmetics bag filled with homemade chocolate chip cookies, a belated birthday treat for the 55-year-old.

“Our dad is the best deal we have at Nordstrom—we don’t pay him,” Blake jokes (Bruce Nordstrom’s personal net worth is estimated at $1.6 billion). “He’s our chief cheerleader and head scorekeeper. He never says ‘You made a mistake.’ That’s how his dad and great uncles were. We’re fortunate to be the recipients of great examples.”

Heritage runs deep at Nordstrom—which is part of the retailer’s appeal in markets across America that have been stripped of their “family” department stores: Jordan Marsh in Boston, Kaufmann’s in Pittsburgh, Hudson’s in Detroit, Marshall Field’s in Chicago. Most of the family-run stores that anchored Main Streets and malls have been purchased by a small handful of department store companies.

Exceptional service and selection were pillars of Nordstrom from the very first shoe store John W. Nordstrom opened in Seattle in 1901. A Swedish immigrant, he struck gold in Alaska and then settled into retail. The company consisted of just two shoe stores when John’s sons took over, and they went on to build Nordstrom into the largest shoe store in the country—and then a full-fledged specialty apparel store. Bruce’s generation made the Pacific Northwest chain into the $13 billion national player it is today. And his sons have aggressive expansion plans over the next five years, with an expectation to hit $20 billion in sales by 2020.

Nordstrom’s feat is staying true to its roots while innovating to stay relevant. Recently that has included high-profile partnerships with popular millennial brands such as Topshop and Madewell, upgrades to its e-commerce site and online acquisitions, including the virtual styling/fashion delivery service Trunk Club.

Nordstrom is in the midst of a major push into Canada, where other American retailers (Target Corp., for one) have failed in epic fashion. Nordstrom now operates stores in Calgary, Ottawa and Vancouver, and it will open three more in Toronto over the next two years. Meanwhile, the company is remodeling three flagship stores: in San Francisco, on Chicago’s Michigan Avenue and at headquarters in Seattle, with the goal of making them tourist destinations.

And bolstering its case that you can be all things to all shoppers, Nordstrom Inc. will nearly double the number of Nordstrom Rack outlet stores around the country in the next five years, from 188 to 300. That’s in addition to last year’s launch of nordstromrack.com.

But perhaps the most daunting expansion project is Nordstrom’s first store in Manhattan. After a quarter-century search for the right location, Nordstrom will open on West 57th Street in 2018. For a company still harboring a bit of an underdog mentality—the little Seattle shoe shop—it’s like finally hitting the big leagues. A strong performance on the home turf of rivals such as Saks Fifth Avenue and Bloomingdale’s will solidify Nordstrom as a force in designer retail. The thought of a less than strong performance? Well, that’s not something the brothers want to fret about.

“We are humbly aware of how many options shoppers have today,” says Blake, whose office is walking distance from Amazon.com headquarters. “One hundred fourteen years of business does not guarantee tomorrow.”

Co-presidency is not the norm among $13 billion retailers, but it’s a tradition at Nordstrom, where Bruce and his cousins led collectively, as did their fathers before them. “We’re a very big company with a lot going on,” Pete Nordstrom says. “We’re an empowered culture for leaders to do their own thing.”

Which is to say, the brothers don’t get in each other’s business. Each has a specific area of responsibility—an arrangement the board insisted upon when Blake, Pete and Erik took the helm 15 years ago (Blake has officially been president that whole time; Erik and Pete were named co-presidents in May, though the three have long made decisions together). Nordstrom is a publicly traded company, so the surname is not job security—another key factor in the brothers’ assertive approach to steering the company.

While their leadership might seem predestined, none of the brothers grew up planning to go into retail.

“I just wanted a car,” Blake says. His parents told him he’d have to earn it, so he went to work in the stockroom at Nordstrom—just the way his father, Bruce, had done a generation before. All three brothers, along with their cousin Jamie, who now oversees stores for Nordstrom Inc., graduated from the stockroom to the sales floor and eventually moved into buying and management.

“Our parents encouraged us to do whatever we were passionate about,” Blake says. “They just wanted us to be proud of our actions. They taught us the importance of reputation.”

Ask Pete and Erik what they wanted to be growing up, and they answer with boyish certainty: “I wanted to play professional basketball,” says Pete, tallest of the three at 6-foot-7. Both he and Erik played for the University of Washington. They settled into retail only after their dreams of going pro were dashed.

“Retail felt familiar,” Pete says. “On the floor in the store, you’re part of a team and the manager is your coach. Every day, you have to sell. Like scoring points. You know if your team is winning or not.”

Wherever the week might take them—to Paris Fashion Week, Southern California or Minneapolis for a new store opening­—Blake, Pete and Erik make a point to be in their Seattle office on Mondays. They start the week by meeting at 8 a.m. “A lot of it is about people and talent,” Pete says. “You have to be of a singular mind when it comes to hiring.”

As Erik says, no one is choosing Nordstrom based on the family. “They’re choosing us based on service. The downfall of many stores is burnout. You’ve got to keep up with customers. You’ve got to stay fresh and relevant.” Acquiring Trunk Club, a styling service that aims to take the hassle out of shopping for men, and HauteLook, a designer auction website, speaks to that evolution. “We needed more plays to run,” Erik says. “It’s not about channels; it’s about the customer.”

A few years ago, younger female customers weren’t buying the clothes. Nordstrom conducted market research that showed women ages 18 to 35 were shopping the store for cosmetics and shoes, but going elsewhere for clothing. Namely, to Topshop and J.Crew.

Those retailers are known in the industry as verticals. They manufacture and sell their own product, as opposed to the way a department store offers an assortment of brands. “There aren’t as many brands to buy from in that space today,” Pete says of the women’s contemporary fashion business. “We needed to be more compelling to younger women.”

So Nordstrom partnered with hot U.K.-based brand Topshop, which has yet to reach most U.S. malls. Analysts called it an odd pairing, but three years later, Topshop has been expanded to 92 of Nordstrom’s 121 full-line stores and continues to perform well. So well, in fact, that J.Crew chairman and CEO Mickey Drexler took note. “He reached out to us a year ago. It was thrilling,” says Pete, still starstruck over meeting the legendary merchant—as if Nordstrom were a mere start-up rather than a leading national retailer. Drexler wanted to expand the reach of its offshoot women’s brand Madewell, which has been outshining the struggling J.Crew. For Nordstrom, it’s another opportunity to deliver a brand that resonates with younger shoppers. The initial partnership was recently doubled, with Madewell departments in 30 Nordstrom stores. “To have the kind of credibility they bring around design within our four walls is powerful,” Pete says.

Nordstrom is taking another play from J.Crew and turning its vice president of creative projects, Olivia Kim, into the Jenna Lyons of the company. The former star buyer of Opening Ceremony, Kim was given carte blanche to curate a new in-store boutique called Space, which launched this fall at four West Coast Nordstrom stores. Space spotlights an eclectic mix of emerging designers—the sort who don’t have the name recognition or distribution capabilities of department store heavy hitters such as Ralph Lauren or DKNY . . . and are, frankly, too cool.

“Sometimes it’s hard for a big company to do this,” Pete says. “It can be scary for a small brand, but they know Olivia.”

Kim also oversees the Pop-In@Nord-strom shops, now at seven stores and online. Nearly every month, the department is reimagined with a new theme and new merchandise you wouldn’t expect to find at Nordstrom. “Nobody is coming to Nordstrom for a jar of pickles,” Pete says, grabbing a jar of McClure’s off the shelf. “But once they see it, they might decide to take it home.”

He looks at designer shoes in much the same light. An $895 Christian Louboutin gold-sparkle high-top may shock some customers, but even if they balk at the price, “we think that’s great,” Pete says. “The seed is planted. And they know that when the day comes, they don’t have to go to Neiman Marcus for that. It’s about expectations.”

Forging into Canada has forced Nordstrom Inc. to think about expectations anew. “We are a company that promotes from within, but we couldn’t do that in Canada,” Blake says. The vast majority of the retailer’s Canadian workforce consists of people who are new to the company, begging the question: Can Nordstrom’s culture of service be taught, today, on such a mass scale?

“It’s about being real, being genuine,” Erik says. “We try to hire nice people, and we tell them to be themselves.”

That’s one of the fundamental lessons the brothers say they’ve learned from their father. He didn’t teach them how to sell. He taught them to be honest, and consistent. It’s one of the very principles—along with a respect for the store’s customers and their good taste—that allows Nordstrom to sell full-priced goods while many competitors treat every day like Black Friday. And to hold off on Christmas decorations until after Thanksgiving, even when the holidays are in full swing throughout the rest of the mall. And to sell $1,450 Fendi boots without repelling bargain hunters.

All things considered, the Nordstrom handbook is really quite brief, Blake says. “Rule No. 1 : Use your best judgment. Rule No. 2: Refer back to rule No. 1.”

Spill It: Tell Us What You Think!

Jeffrey Tandoc
I have been a Nordstrom's customer for many years. Nordstrom's is among my favorite stores. More often than not I am truly happy shopping there. My favorite store is in Chicago on Michigan Avenue.
12/21/2015 1:58:30 AM

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