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nordstrom announced This week, the company released its fourth-quarter 2023 results, and while sales growth for premium brands slowed, sales at the more affordable Nordstrom Rack soared.
“Rack Stores are our largest source of new customer acquisition, accounting for more than 40%, and continue to be our growth engine,” Nordstrom said. Pimunto.
Nordstrom’s New York flagship store.Photographer: Bing Guan/Bloomberg via Getty Images
While new customers may be initially drawn to Nordstrom’s Rack’s relatively affordable prices, the company says that “approximately one-quarter of Rack’s retained customers migrate to the Nordstrom banner within four years.”
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Nordstrom’s premium stores saw sales decline 3% year-over-year in the fourth quarter of 2023, while Nordstrom Rack sales increased 14.6% during the same period. Digital net sales overall fell by 1.7%.
The company said its expectations for the current period include new Rack store openings and increased online sales of premium brands.nordstrom is 53 new rack stores They are scheduled to open by 2025 in states across the country, including Arizona, California, Georgia, and Texas.
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Nordstrom isn’t alone in feeling that luxury sales are declining in the United States. Last year, luxury goods giants such as LVMH experienced weaker-than-usual sales in the U.S. market.according to forbesLVMH, Kering and Richemont all said that “aspirational consumers” – people who buy low-cost luxury goods – did not buy as much as expected.
a Deloitte report Retail trends for Q4 2023 point to an increase in bargain hunting and a focus on value.
“Consumers are increasingly disciplined “People are turning to off-price retailers for these high-quality products at discounted prices, thereby reducing discretionary spending at upscale and luxury stores,” the report said.