Nordstrom stock falls after inventory-free store plan

Nordstrom Inc.'s plan to open a smaller store concept with no inventory isn't sitting well with investors.

The shares suffered their worst decline in more than a month after the department-store chain announced the new "neighborhood-hub" shop, which will open on Oct. 3 in West Hollywood, Calif. The idea is to let customers try on clothing and accessories with the help of a personal stylist. If shoppers like what they see, they can order the goods and have them delivered.

The move embraces a model used by upstarts such as Warby Parker and Bonobos, which generally rely on e-commerce but have boutiques where customers can touch and feel the wares. Smaller shops in urban areas also are less reliant on shopping-mall traffic to fuel sales.

But Nordstrom is an upscale chain known for its selection and service, so the minimalist approach was puzzling to investors. On a day when shares of most major retailers were climbing, Nordstrom fell as much as 5.4 percent to $43.59. The stock had been down 3.8 percent this year through the end of last week.

The new store, called Nordstrom Local, will encompass one styling suite, eight dressing rooms and a central meeting space where customers can talk to personal stylists. Services at the location include on-site alterations and tailoring, same-day delivery and manicure services. Customers can even have a glass of wine or beer.

"We know there are more and more demands on a customer's time and we wanted to offer our best services in a convenient location," Shea Jensen, Nordstrom's senior vice president of customer experience, said in a statement. "Finding new ways to engage with customers on their terms is more important to us now than ever."

While the West Hollywood shop won't have inventory on-site, the stylists will be able to transfer merchandise in for customers from other Los Angeles-area Nordstrom stores, according to Anya Pavlovic, a spokesman for the retailer. She also said that there are no plans to open similar shops at this time.

Business on 09/12/2017

Upcoming Events