The on-going recession the hardest hits luxury stores. After the closure of e-luxury and the continuous losses over at Neiman and Marcus another luxury store seems to have crumbled to the harsh effects of the recession. The latest victim is the chain of Nordstorm stores. Nordstrom Inc. reports that the affluent shoppers have retrenched after years of splurging on designer goods and are no longer willing to pay any status price. Last week, the luxury store said that it’s July same-store sales or sales at stores open at least a year declined 6.9 percent from a year earlier.
For the second quarter, analysts, on average, forecast a profit of 48 cents per share on revenue of $2.14 billion compared to the 65 cents per share that Nordstorm earned last year. Analysts also claim that the coming months will be challenging for the luxury store, working with designers to lower their prices. As for stock performance, Nordstrom’s shares rose 10 percent over the quarter, which ended Aug. 1, and they have more than doubled since early this year. The stock is about 8 percent higher than it was a year ago.
Overall a challenging time for the luxury store needs to work on new marketing strategies to survive this harsh economic climate.