Nordstrom is shuffling its leadership ranks.
The storied retailer announced today, along with its fourth-quarter financial results, that it has named Erik Nordstrom as sole CEO, with Pete Nordstrom serving as president and chief brand officer. Both brothers will stay on the company’s board of directors.
“These titles help clarify our respective roles, as we strive to maximize our impact both as individual leaders and as a team,” Erik Nordstrom said in a statement. “Pete and I continue to be partners in ensuring Nordstrom’s success, and we are both focused on executing our long-term plan.”
Here, three things to know about the new chief executive’s appointment.
The firm is retiring its co-presidency structure.
Since 2015, the Seattle-based chain has employed an unconventional shared management structure, with Erik Nordstrom, Pete Nordstrom and the late Blake Nordstrom — who died last year of lymphoma — serving as co-presidents and members of the Nordstrom board.
However, before his death, Blake Nordstrom assumed many of the traditional responsibilities of a chief executive, often taking the lead during shareholder presentations. At an investor day in May 2017, he explained the leadership model: “The belief is that the strategy, the decisions [and] the outcomes are richer together than individually. It’s like a marriage. It’s hard to do. You’ve got to believe deep in your bones that it’s important [that] you work together.”
Nordstrom remains in the hands of its founding family.
The company is ushering in a new era of leadership after nearly 120 years in business. Co-founded in 1901 by the Nordstrom brothers’ great-grandfather as shoe store Wallin & Nordstrom, the retailer has long been synonymous with humility, service and an unrelenting pursuit of customer satisfaction.
Today, amid a rapidly changing retail landscape, Nordstrom has arguably managed to stay ahead of many of its competitors. As it ramps up its focus on digital, it’s hardly scaling back on its brick-and-mortar strategy: In October 2019, the chain launched its 320,000-square-foot women’s flagship in New York City.
“Pete and I have been in this business all of our lives, and we are retailers cut to the core. All the changes in our business keep it interesting, but we still have the passion for a store,” Erik Nordstrom said in January at NRF 2020: Retail’s Big Show. “Over half of our store sales involve an online journey somewhere in the process, [and] over a third of our online sales involve a store experience. … Those lines are completely blurred.”
He takes the helm at a rocky time for the retailer.
Shares for Nordstrom Inc. declined more than 8% after market close on Tuesday as the firm posted disappointing Q4 results. For the period ended Feb. 1, the department store logged earnings per share of $1.23, missing analyst bets of $1.47, on profits of $193 million. Revenues, which climbed 1.3% to $4.54 billion, also fell short of consensus bets of $4.56 billion.
For the full year, Nordstrom predicted revenues to improve between 1.5% and 2.5% and EPS in the range of $3.25 to $3.50. Its guidance did not include any potential impact from the coronavirus outbreak.
“As we move forward, we are further leveraging digital capabilities and scaling our market strategy to drive sales and earnings growth,” Erik Nordstrom explained. “The momentum from our investments and market strategy is enabling us to get closer to customers, transforming the way we’re serving them.”
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