Nordstrom reduces 3rd-quarter expectations

Posted: Thursday, October 11, 2001

SEATTLE -- Citing the economic effects of the Sept. 11 attacks, Nordstrom Inc. on Tuesday markedly reduced its earnings expectations for the third quarter and said it had laid off about 900 more people than originally reported.

The Seattle-based clothing retailer said it expects to have earnings of between 3 cents and 6 cents a share for the quarter ended Sept. 30, compared to previous expectations of 17 cents to 20 cents a share. The company also said job cuts as a result of the worsening economic environment would total 2,500 people.

Previously, Nordstrom said it had laid off 1,600 people over the past month. Nordstrom employs about 45,000 people nationwide.

Nordstrom President Blake Nordstrom said the company was already struggling in a weak retail market and ''certainly with that event and tragedy on the 11th we experienced a setback.''

An attempt last year to reinvent the store's image -- with a campaign dubbed ''Reinvent Yourself'' -- also proved less than successful, alienating some long-term customers.

Nordstrom said the chain would step up efforts to get a broader base of customers into its stores, including introducing some lower-priced items.

''We need to ensure that every dollar that's being spent is meaningful to the customer,'' he said in a conference call to analysts.

On Monday, the 100-year-old retailer said same-store sales dropped 9.4 percent in September, compared to the same month last year.

Those numbers were boosted considerably by a fall sale that began Sept. 28. Not including the sale, Nordstrom would have reported a 15.2 percent drop in same-store sale, compared to the same period last year.

''They're feeling the pain that anybody who has any sensitivity to the economy is going to be feeling right now,'' said Robert Toomey, an analyst with Dain Rauscher.

He remained positive on the company's long-term outlook, saying Nordstrom already has worked to repair the damage from its unsuccessful ''Reinvent Yourself'' campaign.

''The company still has a very strong brand franchise in the market and they're working very hard on the financial side,'' he said.

Nordstrom is expected to report final third quarter earnings Nov. 15.

Shares in Nordstrom were down 29 cents to close at $15.17 in trading Tuesday on the New York Stock Exchange.


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