Nordstrom is cutting hundreds of jobs, confirming a terrifying new trend among wealthy shoppers

[Janelle2002 3,865]

Nordstrom is cutting hundreds of jobs, confirming a terrifying new trend among wealthy shoppers

Business Insider

Hayley Peterson 7 hours ago

The Nordstrom store is seen at a mall in a Denver suburb May 16, 2008. REUTERS/Rick Wilking

(Thomson Reuters)

The Nordstrom store at a mall in a Denver suburb

Nordstrom said Monday it was slashing 400 jobs at its corporate headquarters.

The move comes two months after the department store chain reported a 3% drop in comparable sales for its fourth quarter, and forecast that profit per share would fall 30% in the first half of this year.

The cuts confirm a terrifying new reality for high-end retailers: Wealthy shoppers are reining in spending and along with the rest of American consumers refusing to pay full price for anything.

Nordstrom inventory increased 12% in the most recent quarter a sign that the chain is having a hard time clearing its shelves, and will likely have to rely on promotions to sell the merchandise.

That can be a risky strategy, particularly for a high-end retailer, because too many promotions can cheapen the brand.

Heavy discounting "will ultimately drag everything down with it, including brand image, potentially quality and essentially the value of all things," retail expert Robin Lewis writes on The Robin Report.

But even steep discounts aren't attracting customers like they have in the past.

Restoration Hardware, which also caters to high-end customers, has said that discounts of 20% to 75% off everything in the store have been failing to boost sales as much as in previous years.

"Our attempt to drive incremental revenue through increased promotional activity in the fourth quarter was less successful than in prior periods, signaling a further pullback by the high-end consumer," Restoration Hardware CEO Gary Friedman wrote in a letter to shareholders last month.

Friedman said Restoration Hardware's customers have been reining in spending in part because of volatility in the stock market.

"Our sense is the increased volatility in the US stock markets, especially the extreme conditions in January, which is historically our biggest month of the quarter for furniture sales, contributed to our performance," Friedman wrote after the company reported preliminary fourth-quarter earnings that fell short of analyst expectations.

Customers are also shifting more spending to big-ticket items, such as cars and houses, while splurging less on clothes, shoes, and other fashion items, according to analysts.

"The shift we have seen over the past several years in which consumers have chosen to spend on 'big ticket' merchandise (cars, homes and home renovations, electronics and smartphones) and experiences seem particularly apparent given the results at Nordstrom," Stifel analysts wrote in a recent note. "'The religion of consumption has been proven to be unfulfilling' is an observation that is proving to be particularly true this season," Stifel analysts wrote in a research note last fall.

Nordstrom says it's now going to focus on creating a "more efficient and agile organization."

"We will never change our commitment to serving customers, but recognize how they want to be served has been changing at an increasingly rapid pace," Nordstrom co-president Blake Nordstrom said in a statement."Meeting our customers' expectations means we must continually evolve with them. We see opportunities to create a more efficient and agile organization that ensures we're best positioned to achieve our goals."

Along with Nordstrom, within the last year Macy's, JCPenney, Neiman Marcus, and Target have also said they would cut jobs at headquarters.

https://www.yahoo.com/finance/news/nordstrom-cutting-hundreds-jobs-confirming-214646565.html

[lostinblue 1,989]

the oil/gas boom was contributing 40% of all economic growth under the Kenyan . The Kenyan said he would bankrupt the coal companies . Peabody coal was at over $200/share 2 years ago and today it is filing for bankruptcy and sells for under $2 per share. Feel the Bern said in the last debate we need to ban all fracking .. You will destroy 10's of millions of more jobs and billions of dollars in economic revenue.... The socialist economic roadmap. Everyone gets a degree for free but find out there is no work . .

[Janelle2002 3,865]

the oil/gas boom was contributing 40% of all economic growth under the Kenyan . The Kenyan said he would bankrupt the coal companies . Peabody coal was at over $200/share 2 years ago and today it is filing for bankruptcy and sells for under $2 per share. Feel the Bern said in the last debate we need to ban all fracking .. You will destroy 10's of millions of more jobs and billions of dollars in economic revenue.... The socialist economic roadmap. Everyone gets a degree for free but find out there is no work . .

Huh? You're spouting stupidity now. Please post people who've gotten free degrees under Obama that he directly implemented. Tick tock

Maybe people finally realized this high end junk is made in the same sweat shops

Edited April 19, 2016 by Janelle2002

[lostinblue 1,989]

Huh? You're spouting stupidity now. Please post people who've gotten free degrees under Obama that he directly implemented. Tick tock

Maybe people finally realized this high end junk is made in the same sweat shops

Friedman said Restoration Hardware's customers have been reining in spending in part because of volatility in the stock market.

[ExPatty 502]

consumer spending continues to grow though in general.

If people really are spending more on cars but less on clothes my faith in humanity takes a small step up

[Janelle2002 3,865]

Friedman said Restoration Hardware's customers have been reining in spending in part because of volatility in the stock market.

Again I'm waiting on you to show me those free degrees

[TBoneTX 45,267]

Wealthy shoppers are reining in spending and along with the rest of American consumers refusing to pay full price for anything.

In general, doesn't it make sense to get the best bargains that one can?

In regard to clothing, sometimes even 80% off regular price is still too much.

Just today, the secretary at work showed me a Tom Ford ad for ties priced at $250.

If I pay more than $2.50 for a tie, I'd better really want it.

Department stores stock limited lines of merchandise that THEY want US to buy.

Conversely, thrift stores and resale shops have a fluid smorgasbord (often in staggering numbers) of what WE want (or can choose) to buy. One merely has to enjoy the "treasure-hunt."

There's an added boon to shopping at these places.

If a shirt or tie or suit gets torn or stained, there's no financial regret that something beastly expensive was ruined.

Upon U.S. arrival, Mrs. T-B. was amazed at the volume and high quality of stuff available at these places, and she rapidly filled her closet with name-brand items in mint condition.

As for me, I regret not having discovered thrift stores far earlier in life.

The downside is that these places can become addictive.

I know someone who's close to owning 100 ties again...

Edited April 20, 2016 by TBoneTX

[Janelle2002 3,865]

In general, doesn't it make sense to get the best bargains that one can?

In regard to clothing, sometimes even 80% off regular price is still too much.

Just today, the secretary at work showed me a Tom Ford ad for ties priced at $250.

If I pay more than $2.50 for a tie, I'd better really want it.

Department stores stock limited lines of merchandise that THEY want US to buy.

Conversely, thrift stores and resale shops have a fluid smorgasbord (often in staggering numbers) of what WE want (or can choose) to buy. One merely has to enjoy the "treasure-hunt."

There's an added boon to shopping at these places.

If a shirt or tie or suit gets torn or stained, there's no financial regret that something beastly expensive was ruined.

Upon U.S. arrival, Mrs. T-B. was amazed at the volume and high quality of stuff available at these places, and she rapidly filled her closet with name-brand items in mint condition.

As for me, I regret not having discovered thrift stores far earlier in life.

The downside is that these places can become addictive.

I know someone who's close to owning 100 ties again...

Uhhh yes, I'm down for getting the best price. Most of the prices are jacked sky up. I've never been one for pricey clothing because growing up we couldn't afford it. Now that I somewhat can buy semi pricey things I still don't because I'm saving. Lol. Also oldest daughter will be in her first dual credit course this fall and we paying.

Biggest problem is cost of living keeps going up but salaries don't. Things are inflated by the rich. They buy up an area change the market price on houses from 200,000 and up and all the other houses go up. Just like waikiki is more expensive. Even the mcdonalds is more expensive because of the people with money. There is a ever growing gap between rich and poor, middle class is almost non existent. So these clothing stores are also losing middle class shoppers

Edited April 20, 2016 by Janelle2002

[TBoneTX 45,267]

Good points, si ma'am.

[ExPatty 502]

Thrift stores are depressing at times but I do have some clothes from them and love cheap pants and shirts. I am gifted probably half my clothes and the bulk of the remainder is from thrift.

[Janelle2002 3,865]