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Speaker 1: The department store Nordstrom celebrating its 125th anniversary this year. Now, it spent the first 70 years of its existence as a publicly traded, excuse me, as a private company. It then spent the next 50 plus years as a publicly traded company and then went private 18 months ago. I had a chance to sit down with the co-CEO, Pete Nordstrom, the great grandson of the founder, at the flagship store in Seattle, Washington, to talk about the transition that he and the rest of his executive teams have been able to make being private and some of the things they've been able to do that he says they wouldn't have been able to do if they were public.
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Speaker 2: Take a listen.
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Speaker 3: As I think about it, I don't know that it's really changed much for the thousands of people that work here or even for customers.
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Speaker 2: And how they interact with us.
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Speaker 3: But particularly for my brother, Eric, and myself and my cousin, Jamie, it's changed how we do our job and for the better. And I'd say that's mostly around the ability to create focus now around really the business and not all the trappings that go with being a public company. I mean, that's all we really knew was a public company and it was fine. But when you don't have those obligations anymore, you start recognizing how much time and clarity that provides a for doing the business, you know, hopefully differently and better.
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Speaker 2: So that focus has helped us for sure.
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Speaker 1: Well, I mean, obviously being public, I mean, it comes obviously with the baggage of having Wall Street looking over your shoulder every three months and probably even more frequently than that. So going private, did that give you the opportunity to do things that Wall Street would not have allowed.
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Speaker 2: You to do?
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Speaker 3: It's not really so much that. It's, you know, when you're a public company, your scoreboard is your stock price. And the stock price has a lot of variables and things that go into that that we don't necessarily have a ton of control over. I mean, your results, obviously, over time really affect that a lot. But it's also true that we're part of a sector of business that wasn't super highly valued by the investing public. And that impacts the multiple impacts to your stock price. And so we went through several years where the department store industry was being squeezed a little bit that way, even if we were having decent results. And it's tough, just morale-wise, with people when they see the stock price and they wonder what's going on, even with customers and what have you. So I think from a sense of just the optics of that, both internally and externally, that mattered. And then I think the other thing is just the control part of it. At the end of the day, my brother and I were two of 10 people on a board. And so while we had a lot of influence, I mean, our family only owned 30% of it. We didn't have entire control. And it just became increasingly important to us that some of the big decisions we were facing, that we wanted to be in a position where we had more influence.
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Speaker 2: On those decisions. How is the company doing financially? We're doing well. I mean, I guess I don't have to tell you. You don't have to. I mean, you're not on Wall Street anymore. No, we've had a good run. The last couple of years have been good for us.
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Speaker 1: Well, last year, I mean, Bloomberg reported you had close to $ 16 billion in sales.
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Speaker 2: Have you surpassed that for 2026? We, yeah, so far, yeah. So far, we've been meeting our beating plan. You know, every month is its own thing.
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Speaker 3: And that's one of the things that I think keeps you grounded in this business is, you know, you're really kind of as good.
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Speaker 2: As you were yesterday, the week before.
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Speaker 3: And, you know, there's all kinds of vagaries that happen in our business that keep you focused on it and keep working on it. So we don't take any of this for granted. That would be hubris. We got to keep.
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Speaker 2: Working at it.
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Speaker 1: So what is your scorecard that you use to sort of determine success? I mean, it can't just be revenue and profits.
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Speaker 2: Well, yeah.
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Speaker 3: I mean, at a certain point, it really is about revenue and profits and not so much stock price.
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Speaker 2: We talked about that before.
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Speaker 3: But a lot of it is the opportunities afforded to us based on where we can go with this business business and that has to do with how customers feel about us and if we have a good reputation with customers if we have a good reputation in the communities that we serve we have a good reputation in our industry it affords opportunities things that things will come up that maybe we can't even envision today but if we're coming from a position of strength trust and confidence then you know who knows what's possible we're We're anxious just to have the business be successful, and ultimately, at the end of the day, the success we have in seeing people around that work here have success, that's really the payoff.
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Speaker 2: Where is the growth coming from?
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Speaker 1: Where do you want the growth to come from?
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Speaker 2: I know you've opened several new Nordstrom rack stores this year.
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Speaker 1: I've seen some commentary that you have the capacity to maybe do as much as 50 a year. does Nordstrom Rack become more of the growth story rather than the flagship Nordstrom brand?
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Speaker 3: Well, it has been in the last couple of years. I think just by virtue of the fact what you mentioned, I mean, if we can go from building five, 10 stores a year to like 50 stores a year, I mean, that's a growth lever. And then, you know, we got a rack.com business that's growing. You know, our digital business is still
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growing and our store business has been healthy. So But I think in terms of what is the biggest growth opportunity we have, it's the rack business. And there's a lot of headroom there. I mean, we keep opening stores and they keep working well. And we have communities and markets that are interested in us having a rack store there. So it's a good place to be for us. We have a lot of choices.
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Speaker 1: Why do you think the rack concept travels a little bit better than maybe the flagship Nordstrom concept?
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Speaker 2: I just think you can have more of them.
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Speaker 3: You know, it's a smaller footprint. It's a little more focused in what it does. You know, there's something about that off-price business that lends itself to the convenience of kind of being able to pull up at a strip mall and park and kind of go in and get what you want quickly and easily, different than going to a mall and a big parking structure and doing all that. So I think it gets back to that point of meeting customers where they are. Customers love value, always have, so that's a big part of the play there. They love great brands. We have access to brands that a lot of the other off-pricers really don't. And I think that that really helps set us apart and create a lane for us. And then if we can do it in a way that's customer-friendly and convenient and a service to them and that shopping journey, then there's a lot of headroom for us, a lot of runway.
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Speaker 1: How has it gotten harder, particularly when it comes to getting inventory, sourcing? Obviously, we're in, let's just say, a tariff regime that didn't exist 10 years ago.
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Speaker 2: How do you manage all that?
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Speaker 3: Well, I mean, we just got to roll with it a little bit. A lot of that stuff we don't have control over. But at the end of the day, if we have a good relationship with our brand partners and we can do it together.
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Speaker 2: It's a win-win.
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Speaker 3: It's not a transactional thing where we're trying to win at their expense or vice versa. I mean, we're both trying to serve customers in a way that works for our companies. And to your point, all these brands we have around us, they all sell direct to customer, but they sell us too. And the reason is we introduce new customers to them that they wouldn't otherwise be able to get. I mean, we have 32 million customers and it's a high quality customer. And so if you're one of these brands, They're trying to do all this stuff direct-to-customer, but it's expensive to build out a bunch of stores or do a bunch of digital marketing campaigns to get your brand well-known in front of customers. Here, people come in and they trust what we do, and they like our curation, they like our assortment, and we introduce a lot of people to brands, and that helps those brands grow too. And those things are not at odds with each other. They can operate a successful direct-to-customer business. We can do our thing here, and it can work together.
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Speaker 1: And that's part of my conversation with the co-CEO of Nordstrom, Pete Nordstrom, of course, the great grandson of the founder of that department, storage.