Nordstrom success built on service

Sunday, Aug. 8, 1999 | 9:25 a.m.

SEATTLE -- The secret of how Nordstrom Inc. managed to develop an avid following well before the company announced plans to build a store in Las Vegas may be held in a sign at corporate headquarters.

In big block letters in a lobby through which employees pass before going to work is this sign: "Think of Yourself As the Customer."

Co-president Pete Nordstrom has a new favorite story exemplifying what that means.

"I'm not even sure which store this happened at, somewhere in the Midwest I think," Nordstrom said in an interview in the shoe department of Nordstrom's downtown Seattle store.

"One of our people got a telephone call from a woman who was having trouble getting a type of shoe that fit. Our employee checked the inventory and found a few pair that sounded about right. So he got back on the phone and said, 'Where are you? I'll bring the shoes to you.' "

Nordstrom explained that taking the shoes to the customer isn't all that unusual in the company.

"But he found out she was calling from a competitor's store in the very same mall," Nordstrom said. "So, he grabbed a few boxes of shoes, walked down the mall into the competitor's store, found the customer and helped her try them on.

"I have no idea whether our competitors ever found out what was going on," Nordstrom said. "But I'll guarantee you one thing: That guy has a loyal customer now."

Similarly loyal customers have been clamoring for Nordstrom to build in Las Vegas for years.

In January it appeared their expectations would be met when Pete Nordstrom accepted an invitation to address Preview '99, an event co-sponsored by the Las Vegas Chamber of Commerce and the Nevada Development Authority.

Companies often make big announcements at events such as Preview, when they have a big audience and maximum exposure.

But Nordstrom deflated the crowd by telling them that while he was flattered with all the attention he was receiving, the company didn't have a deal signed. Other sources reassured Las Vegans that it was only a matter of time before the deal was done, and Nordstrom said the city was a market he wanted to be in.

Four months later in May, the announcement came.

Nordstrom signed a letter of intent with Phoenix-based Westcor Partners, a shopping center developer with projects in Arizona and Colorado, to anchor a high-end shopping center on the Las Vegas Strip between the Mandalay Bay and Luxor hotel-casinos.

Due to open in fall 2001 -- the 100th anniversary of Nordstrom's founding -- the company plans a three-level store as part of a 1.2 million-square-foot mall linking the two hotel-casinos owned by Mandalay Resort Group.

At 225,000 square feet, Nordstrom would be the largest department store in Las Vegas. Presently, Little Rock, Ark.-based Dillard's maintains the city's largest department stores with a 208,000-square-foot store at the Galleria at Sunset and a 206,000-square-foot facility at the Boulevard mall.

Nordstrom signed its deal with Westcor and Westcor had negotiated with Circus Circus Enterprises Inc., the name Mandalay Resort Group formerly went by, to build the mall. But Nordstrom, Westcor and Mandalay won't disclose the terms of the lease that brought Nordstrom to Las Vegas.

Nordstrom said it's too early to discuss details of what the Las Vegas store will or won't contain.

What the company is saying is that the Las Vegas store is the second largest among 33 stores in Nordstrom's four-year, new-store opening schedule. Only a 271,000-square-foot store due to open on Chicago's Michigan Avenue on Sept. 21, 2000, is larger.

The company's largest stores employ about 1,000 people each. Nordstrom is in the midst of an effort to diversify its workplace, and it has been recognized nationally for its efforts to recruit Hispanics, blacks and Asians.

Nationally, 37.2 percent of Nordstrom's employees are minorities as are 24.1 percent of its management.

In 1998 Working Woman magazine rated Nordstrom ninth in the nation as the best place for career women to work in America, and Fortune magazine listed the company 37th on its list of best places to work for Asians, blacks and Hispanics.

Publicly traded Nordstrom Inc. moved from the Nasdaq to the New York Stock Exchange last month, using the symbol JWN, the founder's initials. The stock is trading in about the middle of its 52-week range with the current price at around $34.50 a share.

The company said in Securities and Exchange Commission filings that it could not speculate on the financial effect of three lawsuits filed against the firm. Nordstrom is one of nine department store defendants in a price collusion suit, filed in Marin County, Calif., involving the company's cosmetic line.

The company also is one of 11 defendants in a similar suit involving shoe prices filed in Federal District Court in New York. That case has attracted the attention of the New York attorney general's office and the Federal Trade Commission, which are investigating.

Nordstrom also is one of 28 defendants involving 17 U.S. retailers in a suit filed in federal court in Los Angeles, accusing the retailers of using sweatshop labor from Saipan factories for some clothing lines.

But Nordstrom also works hard at being a good corporate citizen. Nationwide, the company supports hundreds of community programs through contributions, outreach programs, special events and volunteerism.

At its five-level downtown Seattle store, which relocated and reopened earlier this year, children designed and painted tiles that are part of the floor in one of the store's departments. Sponsors donated money that went to charity in the effort.

On the sidewalks surrounding the downtown store, the company formed a Seattle "walk of fame" featuring the signatures and shoe imprints of local celebrities. Representatives from the arts, business and sports are displayed, from legendary rocker Jimi Hendrix to Seattle Mariner outfielder Ken Griffey Jr.

Shoes are a big part of Nordstrom's history.

John W. Nordstrom, a 16-year-old Swedish immigrant, arrived in the United States in 1887 unable to speak English and with $5 in his pocket, according to a company history.

He made his way west and worked in mines and logging camps and in 1897, headed to Alaska's Klondike to look for gold. In Alaska, he met Carl Wallin, a Seattle shoemaker. They agreed to partner in a shoe store in Seattle, so when Nordstrom returned with a $13,000 stake in 1901, he opened Wallin & Nordstrom.

In the 1920s Nordstrom and Wallin retired and the business was turned over to Nordstrom's sons. Three Nordstrom brothers developed the company into the largest independent shoe chain in the United States, and the downtown Seattle store became the largest shoe store in the country.

By 1975 Nordstrom expanded to Alaska and also opened a new division -- Nordstrom Rack, a discount clearance store. The company entered the California market in 1978 and 10 years later, opened its first East Coast store, in McLean, Va. Nordstrom got started in the Midwest in suburban Chicago in 1991.

The third generation of the Nordstrom family retired in 1995, and six new family members took titles of co-president: Bill, Blake, Dan, Erik, Jim and Pete Nordstrom.

Today the company has 99 stores in 22 states, including 68 department stores. It offers two catalogs and an Internet presence.

Special services offered by Nordstrom vary by market. At the Seattle store, the company offers a concierge, restaurants, an espresso bar, alteration service and delivery of purchases to a home or office.

It also offers Personal Touch, a personal shopping program that offers a consultant for wardrobe transactions, and Spa Nordstrom, a massage and body treatment facility.

Pete Nordstrom said it's possible the company could partner with a transportation company and a hotel-casino to deliver shoppers to Las Vegas when its three yearly sales are conducted. The company's annual sale occurs in July with others on women's and children's apparel in November and menswear in December.

George Connor, senior vice president of Colliers International, called Nordstrom "clearly a step up from Robinson-May but a step down from Saks and Neiman-Marcus."

"They offer good, affordable quality," Connor said. "They have a lot of different lines of merchandise, some Nordstrom brand stuff. Of course, the one thing they clearly offer is the higher level of service.

"All of us have our favorite stories about Nordstrom service," Connor said. "Mine is about the guy who wanted to get a refund because he felt his tire should have held up longer than it did. Nordstrom gave him the refund. They don't even sell tires. But they wanted to keep their customer happy."

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