Can Nordstrom find growth outside of its Rack expansion?

Nordstrom seemed immune from the problems plaguing the rest of the department store sector, but this is no longer the case. I posted some thoughts on RetailWire last month after the company’s earnings announcement:

If I were a JWN shareholder, I’d be happy that the company is growing the Rack business. It’s good to have a growth vehicle in light of the well-documented issues with both the traditional department store business and the near-luxury brands like Coach, Michael Kors and Ralph Lauren. And Nordstrom has always been very cautious about opening its full-line stores.

This being said, the company’s brand reputation is really built on the success of its full-line stores. I shopped my local Nordstrom on Saturday (newly opened in Milwaukee last fall) and I wonder whether a little more attention to the store’s value positioning — without hopping on Macy’s promotional carousel — might help its traffic levels and reduce its clearance levels more effectively.

And some further thoughts about how Nordstrom can grow its core business, based on its announcement about a partnership with J. Crew:

For Nordstrom, this continues a trend that already includes partnerships with Madewell and Topshop. A presence inside Nordstrom has helped these two labels create brand awareness (and benefit from the halo effect) as they build out a relatively small footprint of their own stores.

The association with J. Crew is different: This brand has been in the penalty box with its loyal fans for at least a couple of years, and it’s debatable whether its merchandise content problems have been fully addressed yet. (Plus, there is no scarcity of J. Crew locations across the country.) I see more upside for J. Crew than for Nordstrom (especially if JWN has to carve out space that could be devoted to higher-performing goods), but it puts some burden on JWN to make sure that its J. Crew shops put forward the “best of the brand.”

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