Family stewardship at Nordstrom
Shortly before Christmas, the Wall Street Journal reported that Nordstrom Inc. has been faring better in the economic downturn than some rival chains because the Seattle company "acted earlier than many retailers on signs of the recession."
I wasn't surprised to learn that the company, which is 25% owned by the Nordstrom family, had been proactive in anticipating the recession and then, as the Journal reported, taking measures like creating less expensive lines, entering more sales channels, postponing store renovations and reducing back-office operations. The Nordstroms have established a tradition of being prudent stewards of their company.
In 2000, Bruce Nordstrom, grandson of the founder, returned to the chairman's post after five years of retirement to repair the company's reputation, which had been damaged by an ill-fitting marketing strategy put in place under non-family leadership.
Bruce Nordstrom retired again in 2006; his son Blake is now president. Blake Nordstrom's brothers, Pete and Erik, also hold the titles of president -- of merchandising and stores, respectively. Family members occupy three of nine seats on the company's board.
Blake, Pete and Erik Nordstrom can mine their family business's history for lessons in successful fraternal collaboration. The founder's sons, Everett (Bruce Nordstrom's father), Elmer and Lloyd Nordstrom, shared leadership responsibilities, wrote Robert Spector (no relation to your blogger) and Patrick D. McCarthy in their 1995 book The Nordstrom Way. The book, which is excerpted in The Family Business Leadership Handbook, noted:
Like all successful entrepreneurs, the three brothers shared a single-minded devotion to the business.... They never went to lunch together because their policy was that one of them should be present in the store at all times.... At the end of the day, they were the last ones to leave the store.
Three cousins of Blake, Pete and Erik left the company in the 2000s. Dan Nordstrom, who had been CEO of Nordstrom.com, resigned in 2002. Bill Nordstrom, who had been executive vice president and general manager of Nordstrom's East Coast operations, and Jim Nordstrom, who had been a co-president in charge of Nordstrom full-line stores, both left in 2000.
Posted Friday, January 15, 2010 by Barbara Spector • 1 Comments • Permalink
I’ve always heard it said that if a company spends more on advertising and marketing during an economic downturn, they will attract more customers. I think the reason why is that marketing is usually one of the first departments to be held accountable and disciplined if product isn’t moving. When Nordstroms entered more sales channels they increased their presence and in turn, they took the appropriate risk of increasing their marketing budget.
As an example, a few years ago when no one seemed to be buying cars, there were a few car companies whose presence was constant on television and radio. Those few companies actually increased sales! Vehicles are just an example of my larger point, but the research that has been done backs me up.
Good for Nordstroms for making the right choice.
Commenting is not available in this channel entry.