Nordstrom and Asos are employing a “clean-slate” approach to drive Topshop and Topman’s businesses in the U.S. — and the new partners could soon be teaming up on other projects too.
In Nordstrom’s fourth-quarter conference call yesterday, executives said they were enthusiastic about Topshop’s new chapter under British powerhouse Asos, which acquired the brand and other labels in the now-defunct Arcadia Group portfolio for 330 million pounds last month.
“It’s a very big and very important vendor for us,” said Pete Nordstrom, president and chief brand officer, in the call. “So it was important to us that it landed with someone we have a lot of confidence in.”
Nordstrom said he’s bullish that Asos, which is focusing on international expansion, will invest in Topshop to help elevate its position in the market. “[Asos] is counting on their relationship with us to realize the full value of this investment. It gives us a huge opportunity in North America, specifically, to really own this business.”
One major advantage of the deal, according to Nordstrom, is that Asos is not a traditional wholesale outlet. (The department store said at its investor day last month that it would reduce it wholesale business to about 50% over time.) “We’re motivated by their ambition and their willingness to partner in new and different ways,” the Nordstrom said.
But the plan goes beyond just Topshop. “There’s other commercial opportunities that are available to both of us through in this relationship,” Nordstrom said, referring to other brands in the Asos portfolio.
Overall, Nordstrom noted that the pandemic has fueled fresh thinking at Nordstrom. “It’s given us all an opportunity to rethink how this all works, in the spirit of being more agile, making things better,” the executive said.
This week, the department store also announced a new tie-up with Tonal, the at-home fitness company that will now have a retail presence in 40 Nordstrom stores. “The business, increasingly, is less about a whole legacy view. It’s more trying to think about a clean slate and how we can pursue the categories and the products that our customers are most interested in,” Nordstrom said.
The retailer’s new strategy will be key to its pandemic recovery plan, which is focused heavily on digital and the growth of Nordstrom Rack.
Nordstrom said yesterday its Q4 earnings declined 83% year over year to $33 million, or 21 cents per share. Sales dropped 20% to $3.55 billion.
While it’s been a tough ride, Nordstrom has pivoted quickly, and digital represented 54% of overall sales in the period, compared to 35% in the same quarter last year. E-commerce sales grew 24% in Q4.