Nordstrom, John W.

Business Leader Profiles for Students January 1, 2002 Nordstrom, John W.

Nordstrom Department Stores (1871-1964) Overview In 1901 John Nordstrom and his partner Carl Wallin founded a modest shoe store in the Pacific Northwest boom town of Seattle, Washington. From this tiny seed would come the Nordstrom department store empire, which by the 1990s encompassed a chain of upscale stores stretching all the way to Boca Raton, Florida. Successive generations of John Nordstrom’s descendants have run the family enterprise, which has grown to become a more than $4 billion-a-year company with a reputation for excellence.

Personal Life Johan W. Nordstrom was born on February 15, 1871, in the Swedish town of Alvik Neder Lulea, just 60 miles south of the Arctic Circle. His early life was harsh. Nordstrom’s father, a blacksmith, died when the boy was just eight years old, and three years later, his mother took him out of school to work on the family’s farm. His mother, he would recall later in a privately published memoir called The Immigrant in 1887, “seemed to think I was a man.” She expected him to perform at the same level as a brother who was 10 years older. “I often cried when I had trouble doing things she expected me to do and couldn’t, and felt very helpless.” In 1900, Nordstrom married Hilda Carlson, another Swedish immigrant living in Seattle. They had five children, and their three sons, Everett, Lloyd, and Elmer, grew up to run the family business. Later the three would turn the enterprise over to their sons. By the 1990s a fourth generation of Nordstroms had emerged.

John Nordstrom was just 16 when, with two companions, he left his hometown for the first and last time. He had with him the equivalent of $112, which he had inherited, and he wore his first suit, the only item of clothing he had ever owned that was not homemade. He set off for the Pacific Northwest of the United States, a mecca for Swedish immigrants. The young man had a long trek ahead of him: a two-day boat trip to Stockholm, the Swedish capital; another three days to a Baltic Sea port where he set sail for Hull, England. From Hull he traveled by train to Liverpool, from whence he took a 10-day voyage to New York’s Ellis Island.

Barely able to speak English, Nordstrom and his two companions bought a train ticket to Stumbaugh, Michigan. By now he only had $5 left, and a relative in Stumbaugh helped him get work hauling iron ore. It was back-breaking work, and he was nearly killed in an iron ore slide. For a grueling 10-hour day, he earned $1.60.

Over the next five years, Nordstrom worked his way westward in a series of tough jobs. He worked as a logger in Michigan, a coal miner in Iowa, a gold and silver miner in Colorado, a railroad worker in northern California, and a logger in Washington. In the summer of 1896 he used his savings to buy a 20-acre potato farm in Arlington, Washington, some 50 miles north of Seattle.

One Sunday morning a year later, Nordstrom read in his morning paper about the discovery of gold in Alaska. He became excited and asked a friend to go with him. The friend chose not to go, so Nordstrom set off that afternoon for Seattle with nothing but the money he had in his pocket. He sailed from Seattle to Port Valdez, Alaska, then went overland to the gold fields at Klondike. During the trip he nearly froze to death and had to kill his horse for food. Finally he arrived in the Yukon Territory boom town of Dawson, near Klondike, and he spent the next two years digging for gold.

Finally he found it, but immediately became embroiled in a claims dispute with another miner who happened to be the brother of the local gold commissioner. Instead of allowing himself to get into a protracted battle he could not win, Nordstrom sold his share for $13,000 and went home. web site nordstrom promotion code

Career Details In May of 1900, Nordstrom, back in Seattle and married, decided to go into business with a shoemaker he had met in Klondike. The shoemaker’s name was Carl Wallin, and he owned a shoe repair shop that the two converted into a store using $5,000 of Nordstrom’s money and $1,000 of Wallin’s. They invested another $3,000 in inventory, and in 1901, Wallin & Nordstrom opened its doors.

The two did not seem particularly well-suited for the business, since neither spoke English very well, nor did they look like fashion trendsetters. But through hard work and what would become their trademark strategy, the use of a varied stock and a large inventory, the business grew. In 1905 it had sales of $47,000. They bought out another store and moved to a new location, using a loan of $10,000 from the Scandinavian-American Bank. Nordstrom had secured the loan by putting up his two houses and some property he owned. web site nordstrom promotion code

As the business grew, so did Nordstrom’s sons, and his two older boys began working at the shoe store in 1915. Eight years later, in 1923, Wallin and Nordstrom opened another store in Seattle, and Nordstrom put his 20-year-old son Everett in charge of it. But Nordstrom and Wallin had a falling-out of some kind, and in 1928, Nordstrom sold his share in the company to his two oldest sons for about $120,000. He continued to run the business for some time, since he had loaned his sons the money to buy it, and had co-signed on a bank loan to help them obtain the necessary capital. Nonetheless, he gradually let his sons take the front seat in the store, which became known as Nordstrom on August 19, 1930.

Nordstrom would grow under the stewardship of John Nordstrom’s sons, even during the Great Depression. World War II brought additional challenges. The military demand required all the country’s leather supplies, so shoe manufacturers had to use rubber soles. Nordstrom’s inventories were seriously depleted. The company was forced to use ration stamps to purchase the limited number of shoes available for retailers and the civilian public. Nordstrom’s nationwide pursuit of shoes during the war years earned his company its long-standing reputation for a large and assorted inventory. As a result of these efforts, John Nordstrom was honored by his industry as “Shoe Man of the Century” in 1961.

After the war, Nordstrom was the largest independent shoe chain in the country. Not content with this, the Nordstrom family sought out expansion opportunities. In 1963 the company purchased Best’s Apparel stores. Best’s was a specialty chain that carried women’s designer clothing. The growth continued and soon Nordstrom stores carried men’s apparel, children’s wear, accessories, and cosmetics.

Nordstrom started out, however, selling shoes, and shoes remained a mainstay. In the shoe department, and in the store as a whole, one of Nordstrom’s hallmarks was the breadth and depth of its inventory. According to legend, this was due to the fact that Wallin’s and Nordstrom’s neighbors and friends were Swedes, who had larger feet than less robust people. Whatever the cause, even in the 1990s, Nordstrom had 20 to 30 percent more inventory per square foot than its competitors, thus giving customers more choices.

One way that John Nordstrom provided for the future was to make sure that his sons got an education by working in other’s shoe stores. He sent his oldest son, Everett, east to work at Marshall Field & Company in Chicago. Everett later reported that although Marshall Field inspired awe in this young Seattle boy, he was disgusted at the way the store’s management treated merchandise roughly and lost track of inventory. When Everett returned from Chicago, his father asked him what he had learned. “In all honesty,” Everett replied, “I did not bring back a lot of good ideas about what I should be doing in the retail business. But I certainly learned several things I should not do.” To this his father answered, “In that case, you learned quite a bit.” Later Everett’s son Bruce would have a similar experience when he went to work at Macy’s in New York City. Bruce realized that the giant department store’s management simply assumed that a certain percentage of its shoes would be stolen, and he vowed that at Nordstrom, the theft or “shrinkage” rate would be very low. In fact, it is currently about half the national average for department stores. This may be because, as Bruce Nordstrom has said, employees feel a sense of ownership. If they see someone stealing, they think, “That’s my merchandise. Don’t you steal from me!” Since John Nordstrom’s death in 1964, the store has continued to grow under the guardianship of his family. In 1970 the third generation of Nordstroms officially took the helm. Today, many members of the fourth generation are employed by the company. In the 1990s it had become one of the United States’ largest family-owned businesses. The retail legacy John Nordstrom created employs more than 40,000 people in 18 states.

Social and Economic Impact John W. Nordstrom only established the store that would become Nordstrom; his sons built the department store chain. By 1995, when a fourth generation of Nordstroms began to take the helm, the chain consisted of 90 outlets in 18 states, generating $4.11 billion in annual sales. Nordstrom Inc. became the largest independent fashion specialty retailer in the United States, and along the way, it gained an outstanding reputation for excellence in customer service.

Chronology: John W. Nordstrom 1871: Born.

1887: Left Sweden for the United States.

1896: Settled in Seattle, Washington.

1897: Headed to Alaska during the Klondike Gold Rush.

1899: Struck gold and returned to Seattle with $13,000.

1901: Opened Wallin & Nordstrom shoe store.

1930: Opened first Nordstrom department store.

1961: Honored as “Shoe Man of the Century.” 1964: Died.

Nordstrom’s legendary customer service and liberal return policy are a benchmark to which all retail concerns can aspire. In many companies, the board of directors tops the pyramid-shaped chain of command, but not at Nordstrom. Its decentralized structure is best described as an inverted pyramid, with the customers at the top, followed immediately by sales and support staff members. Further down the pyramid is Nordstrom management, with the board of directors at the bottom. Without a doubt, the most important people at Nordstrom are the customers.

Sources of Information Contact at: Nordstrom Department Stores 1501 5th Ave.

Seattle, WA 98101 Business Phone: (206)628-2111 Bibliography “Business Brief: Nordstrom Inc.: First Florida Store to Mark Expansion in the Southeast.” The Wall Street Journal, 21 May 1997.

Johnson, Kaylene. “Nordstrom: From Klondike Gold to a National Retail Legend.” Alaska Business Monthly, April 1993.

Pederson, Jay, ed. International Directory of Company HistoriesDetroit: St. James Press, 1997.

Reda, Susan. “Department Stores Debate Sales Commission System.” Stores, November 1996.

Spector, Robert and Patrick D. McCarthy. The Nordstrom Way: The Inside Story of America’s #1 Customer Service Company. New York: John Wiley, 1995.

Weinstein, Steve. “The Nichemakers.” Progressive Grocer, February 1997.