Multichannel
Nordstrom to Spend $140m on E-commerce Infrastructure in 2012
- 22nd February
- Natasha Sholl 100
US department store Nordstrom has reported massive online growth, announcing an investment of $1 billion over the next five years to support its e-commerce infrastructure.
Upscale department store Nordstrom Inc has reported a strong year, but it’s the company’s online sales which have seen stellar growth. The direct business, which is essentially all online, has recorded its largest sales increase.
In accordance with this growth, Nordstrom will add nearly 400 e-c0mmerce employees to its direct business and flash-sale retailer HauteLook. Nordstrom CFO Michael Koppel told Wall Street analysts that sales for HauteLook (which Nordstrom acquired in 2011) grew about 60% for the year ended January 28. Direct sales increased about 30%. Total sales increased 12.8% to $10.50 billion from $9.31 billion in 2010. Same-store sales grew 7.2% year on year. Direct sales accounted for about 8.7% of total sales compared with 7.6% in 2010. In the last quarter, direct sales increased about 35%.
Koppel told analysts on the company’s recent year-end earnings call, that it will spend almost $1 billion over the next five years to support its e-commerce infrastructure.
“In 2012, we plan to spend over $140 million in e-commerce, representing approximately 30% of our capital expenditures, compared to a spend of almost $100 million or approximately 20% last year,” said Koppel.
About 60% of the company’s $3.3 billion in capital expenditures for the next five years will be for new stores and remodels, Koppel told analysts, with approximately 30% to fund e-commerce growth. That is double the amount originally set out in the company’s five year plan last year.
