February 21, 2011, 4:32 PM

HauteLook will help Nordstrom stay connected to fashion-conscious shoppers

HauteLook gives Nordstrom a better platform for innovating online, says CEO Blake Nordstrom.

Mark Brohan

Research Director

Lead Photo

Nordstrom Inc. acquired HauteLook.com, a private sale web site, as one way to help stay current with fashion-conscious younger consumers who like social media and newer ways to shop online, CEO Blake Nordstrom told Wall Street analysts last week on the retailer’s year-end earnings call.

“Looking ahead, technology, online and social networking are all areas where we're working on providing the kind of functionality that our customer needs in order for us to be their store of choice,” Nordstrom told analysts. “We know the way our customers shop for fashion is changing rapidly. HauteLook provides a platform of speed, capability and innovation to support our customer-driven strategy.”

Nordstrom, No. 29 in the Internet Retailer Top 500 Guide, announced last week it would buy HauteLook, which offers online private sales of fashion and lifestyle products. Nordstrom says it will buy the company for $180 million in stock plus additional incentives if the flash sale site meets certain goals. HauteLook is No. 191 in the Internet Retailer Top 500 Guide.

“What's exciting about the addition of HauteLook to our company is how together we can better serve our customers,” said Nordstrom. “Within two years, more customers will access the Internet via mobile device than with a computer. Customers are responding favorably to those retailers that move at their speed and make it convenient for them to shop on their terms.”

Nordstrom will operate HauteLook as an independent, wholly owned subsidiary under the supervision of its current management. HauteLook also will retain its brand and web site, says Nordstrom. “Nordstrom Direct continues to be our fastest-growing part of the business and adds to the Nordstrom experience that our customers expect,” he told analysts. “The online business is an important cornerstone of our growth strategy, and HauteLook will contribute to our overall results in this space.”

In addition to its acquisition of HauteLook, which is expected to be complete by the end of the first quarter, Nordstrom also is looking to expand e-commerce this year through a number of other initiatives, but didn’t disclose specifics. “Technology is changing how customers shop,” chief financial officer Michael Koppel told analysts. “It is a much larger enabler than in the past, encompassing communication, mobile shopping, salesperson tools and store formats.”

Nordstrom has stopped breaking out direct sales, which are predominately e-commerce, in its quarterly and year-end earnings. But for the year ended Jan. 29, the company reported:

  • Total sales rose year over year 12.7% to $9.31 billion from $8.26 billion.
  • Net earnings increased 39% to $613 million from $441 million in 2009.
  • Comparable-store sales increased 8.1%.

For the fourth quarter:

  • Total sales rose year over year 11% to $2.82 billion from $2.54 billion.
  • Net earnings increased 34.9% to $232 million from $172 million in Q4 of 2009.

Comparable-store sales increased 7.2%.

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