Nordstrom Is Going the Wrong Way

Nordstrom (JWN) has earnings coming up next Thursday after the market closes. Until this week, I was trading it as if they might surprise to the upside. However, after having a chat with my fashion-blogger wife (Lauren of bigblondehair.com), I have concerns about where the company is. Here are the major concerns:

Shipping: Now that Amazon (AMZN) has two-day shipping and is getting into higher-end fashion, Lauren doesn't want to wait five to seven days to get clothing she ordered and doesn't want to pay $15 for two-day shipping. This is a real problem for JWN. While they have great brands, some of which are not at AMZN, there are enough that they are going to have to do something about the shipping issue. I think they need to come up with some way to get two-day shipping free to retain the bulk of their millennial clients. Customer service: While still better than just about everyone else in the business (Macy's (M) is an unmitigated disaster when it comes to service and Saks/Neiman's are about as welcoming as a gated community to the average American), JWN has tightened its customer policies. This is one of the things people love about JWN and they appear to be getting away from it. Product: What are they carrying that differentiates them? They are not as nice as Neiman's, nicer than M, but there is nothing outstanding that they have in their inventory. There is no fashion trend right now that is sending people to stores. Trends: Speaking of trends, athleisure, which is the dominant trend, involves the buying of high-end track suits. Guess what, a high-end track suit costs way less than a really nice pair of jeans, and much less than a suit. This is a trend problem. Ivanka Trump: They can't win here; the PR team did a bad job with this. I'm not sure why they put a leg out here, it has cost them. They couldn't win because of the boycott, now they probably can't win again because of a counterboycott. There were better ways to handle this.

For this reason, I think JWN might be heading into the $30s or potentially lower before all is said and done. Therefore, I would not be looking to go long into earnings and might be looking short....53 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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