Nordstrom, one of the many national retailers hit by the pandemic, has added a new arrow to its quiver as it fights an uphill battle to win back customers, especially young people: it partners with Asos, the retail giant. online fashion.
Nordstrom said on Monday it was buying a minority stake in the Asos unit which owns Topshop, Topman, Miss Selfridge and HIIT, which Asos bought into bankruptcy this year. Nordstrom will also enter into a partnership with Asos that will bring the retailer’s brands to department stores and allow Asos buyers to pick up and return products in Nordstrom and Nordstrom Rack stores. Financial details of the deal were not disclosed.
The partnership comes as national chains, especially department stores, scramble to attract a generation of shoppers who have a world of shopping options at their fingertips and are increasingly likely to watch the movie for years. 1990 “Mallrats” through an anthropological lens. Nordstrom has tried to break away from its association with other department stores based in shopping centers. It has reduced the number of its full-price stores while rapidly expanding its low-cost Nordstrom Rack chain, whose stores are often located in malls. Nordstrom has also made investments to better link its digital operations to its physical stores, through initiatives such as creating locations where customers can pick up and return their purchases online.
The deal secures a physical footprint for Asos in North America, and it will help Nordstrom improve its assortment and services for millennials and a growing cohort of Gen Z shoppers, said Peter Nordstrom, president of the namesake chain. and brand director, in an interview.
âThere is a great opportunity for us to be more meaningful to clients in their twenties and to younger clients,â he said.
It also makes sense, after a year of retail dislocation, to strike a deal with an online-only fashion company like Asos, he said.
“Particularly with the pandemic, what we thought was going to happen with online commerce over time ended up happening very quickly as stores were closed,” Nordstrom said. “What we continue to believe is that the main ingredient for success in the future is how these things work together.”
In the past, Asos did not have a physical store presence. The company targets customers in their twenties and offers more than 85,000 products on its site. It’s based in England, but North America accounts for about 13% of the company’s global sales and has around 3.3 million active customers, according to Nick Beighton, chief executive of Asos.
âOne of the most frequently asked questions I get is: When will Asos have a store? “,” Beighton said in an interview. âWe’re not good at running stores; we are good at innovating digitally and creating incredible brands and products.
With Nordstrom, he added, âI now have a perfect answer for North American customers.
Preparations for the deal date back to late last year, when the pandemic forced UK retail company Arcadia Group to administer, in a form of bankruptcy. Two of Arcadia’s brands, Topshop and Topman, had been present at Nordstrom since 2012 and have long been popular with consumers. Nordstrom was therefore monitoring who could acquire the labels.
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âWe wanted to make sure it landed in good hands because we feared this company would go down,â Mr. Nordstrom said.
Asos agreed to buy brands including Topshop this year for around 265 million pounds ($ 365 million at the time). Mr Beighton said Asos picked the best labels in the process and planned to “put the sizzle back into those brands for customers who want them and want them to be better.”
After Asos acquired the brands, Mr. Nordstrom was introduced to Mr. Beighton, and the two began discussing ways their companies could work together. When Nordstrom introduced Topshop to its stores years ago, it caused a stir among young shoppers, who still love the brand and “aren’t hooked on issues with Topshop compared to their financial issues,” Mr. Nordstrom.
Asos is inspired by the lifestyle of today’s 20-year-olds, who can be fickle consumers compared to other demographics. He plans to stay focused on this specific age group. âWe don’t want to grow old with our customers,â Mr. Beighton said.
Asos will offer products from all of its brands at a lower price than other Nordstrom products. It will also allow Nordstrom to tap the pipeline that already exists between young North American shoppers who buy clothes from Asos and see the clothes through a much wider opening than previous generations.
âWe want to make sure that we can bring relevant fashion at a good value for the customers, but I think there is also all the interest of the discovery and new things that arouse their interest,â said Mr Nordstrom said. âThey are exposed to so much more. It’s not just âThis is my local mall, this is my pickâ. They know that their selection is the whole world.
For Asos, the partnership was unrelated to the pandemic apart from the possibility of acquiring brands like Topshop, according to Beighton. Nordstrom, on the other hand, is looking for new ways to boost business after a tough year. Its sales fell 32 percent to $ 10.4 billion in the year that ended Jan. 30, from the previous year, and it lost $ 690 million.
âFor me, the pandemic has created an opportunity to think about business differently,â Mr. Nordstrom said. âIt accelerated the idea that a traditional way of approaching businesses and customers was probably not going to work.