Kevin JohnsonNordstrom is a leading luxury department store chain based in Seattle, Washington. The company was founded in 1901 by John Nordstrom and Carl Wallin as a shoe store called Wallin & Nordstrom. In 1963, Nordstrom expanded its offering to include apparel.
The chain became a full-line retailer in 1971 and introduced its off-price Nordstrom Rack division in 1973. It owns several brands, including Nordstrom Rack, Trunk Club, BevyUp, and HauteLook.
In 2022, the company had around 60,000 employees and over 350 locations. Nordstrom lowered its 2023 full-year guidance after sales dropped 1.7% at its full-line stores and 7.6% at off-price Rack during the 2022 holiday season. [1]
Nordstrom offers cosmetics, beauty products, fragrances, accessories, jewelry, handbags, footwear, and clothing. The chain operated physical stores in the US and Canada but announced plans to close its Canadian stores and cut 2,500 jobs by Jun 2023.
Consumers outside the US can access Nordstrom’s products via its digital platform and online channels, including Nordstrom and Rack apps and websites. In 2022, the chain operated 100 full-line Nordstrom stores, 7 Nordstrom Local locations, and 249 Nordstrom Racks. The retailer sells returned merchandise through its Last Chance clearance shops in Chicago and Phoenix.
However, Nordstrom faces stiff competition from Kohl’s, Macy’s, GAP, Dillard’s, Target, Bloomingdale’s, Neiman Marcus, Saks, TJ Maxx, and JCPenney. [2]
Here is an in-depth analysis of Nordstrom’s top competitors and alternatives:
1. Kohl’s
Year founded: 1962
Headquarter: Menomonee Falls, Wisconsin
Kohl’s is an American department retail store founded by Maxwell Kohl. The chain started as a grocery store and switched its focus to providing apparel, shoes, beauty, and home products. In 2022, Kohl’s had around 99,000 employees and operated 1,165 stores in every state except Hawaii.
Kohl’s and Nordstrom cater to men, women, and children. As of Dec 2021, Kohl’s was the largest department store chain in the US. The main competitive advantage for Kohl’s over Nordstrom is its Sephora partnership. CEO Tom Kingsbury said Kohl’s could rely on Sephora to attract more young female shoppers.
The retailer opened 200 Sephora shops in 2021 and 400 Sephora stores in 2022, with plans to expand Sephora’s presence across all Kohl’s stores by 2025. Kohl’s is the top Nordstrom competitor and alternative. [3]
2. Macy’s
Year founded: 1858
Headquarter: New York City, New York
Macy’s is a department store chain founded by Rowland Hussey Macy. It offers high-quality brands at a great value, from off-price to luxury products. Since 2020, Macy’s has downsized its operations as part of its 3-year Polaris growth strategy and closed 36 Macy’s stores in 2021 and 4 locations in 2022.
Macy’s operates an integrated retail business that combines e-commerce with physical stores to streamline the shopping experience. The chain features several brands, including Macy’s, Bloomingdale’s, and Bluemercury. In 2022, Macy’s opened eight smaller-format stores and 42 Macy’s Backstage locations and is one of the best alternatives to Nordstrom. [4]
3. Gap, Inc.
Year founded: 1969
Headquarter: San Francisco, California
Gap is a global clothing and accessories retailer. The company owns four multi-billion dollar brands, including Gap, Banana Republic, Old Navy, and Athleta. In 2022, Gap had over 95,000 employees and served customers across 43 countries.
Gap operates physical stores and online sales channels. In Mar 2023, the company implemented a shakeup of its C-suite as part of its cost-cutting strategy. The company fired Athleta CEO Mary B. Laughton, Chief Growth Officer Asheesh Saksena, and Chief People Officer Sheila Peters after sales declined across all its brands.
The C-suite restructuring effort will deliver $550 million in annualized savings, retaining Gap as one of the top Nordstrom competitors. [5]
4. Dillard’s, Inc.
Year founded: 1938
Headquarter: Little Rock, Arkansas
Dillard’s is an upscale American department store chain. The retailer operates 247 stores, 27 clearance centers, and an e-commerce service across 29 states. In 2022, Dillard’s had around 30,000 employees.
Dillard’s and Nordstrom are the leading department stores in the US, but Dillard’s reported a 5% sales increase in 2022, while Nordstrom posted a 3.5% drop.
In Q1 2023, Dillard’s closed three stores in Florida, Nebraska, and Arizona but plans to open a 140,000-square-foot store in Sioux Falls, South Dakota, in 2024. Dillard’s is one of the best alternatives to Nordstrom for cosmetics and home selections. [6]
5. Target Corporation
Year founded: 1902
Headquarter: Minneapolis, Minnesota
Target is an American retail corporation and the eighth-largest retailer in the US. The chain store offers clothing, accessories, electronics, beauty items, health products, jewelry, food, furniture, and other on-trend merchandise. In Jan 2023, Target had 440,000 employees and operated around 1,950 stores.
Target is a big-box retailer, while Nordstrom is a department store specializing in fashion and beauty products. The retail giant delivered 26 million packages via its nine operational sortation centers in 2022.
In Feb 2023, Target announced a $100-million plan to expand its network of supply chain hubs to cut costs and speed up online order deliveries. The company expects to deliver 50 million packages through the centers in 2023 and build at least 15 facilities by Jan 2026. Target is a formidable competitor for Nordstrom. [7]
6. Bloomingdale’s
Year founded: 1861
Headquarter: New York City, New York
Bloomingdale’s is an American luxury department store chain. The company is owned by Macy’s, Inc., but it operates as a separate entity. In 2022, Bloomingdale’s had over 10,000 employees and 54 stores across the US.
Bloomingdale’s and Nordstrom offer clothing, shoes, accessories, and beauty products and have embraced the small-format store trend. Nordstrom operates 3,000-square-foot small-format stores under the Nordstrom Local brand, while Bloomingdale’s launched its small-format concept in Virginia in 2021.
The company opened its second small-format store in Chicago in Nov 2022, with plans to roll out the third location in Seattle. Bloomingdale’s is one of the best alternatives to Nordstrom for luxury merchandise. [8]
7. Neiman Marcus Group, Inc.
Year founded: 1907
Headquarter: Dallas, Texas
Neiman Marcus Group is an integrated luxury retailer with iconic brands, including Neiman Marcus, Bergdorf Goodman, Horchow, and Last Call. In 2022, Neiman Marcus had about 10,000 associates and operated 36 stores in the US, but the company laid off 5% of its workforce, or about 500 employees, in Feb 2023. [9]
Neiman Marcus is a luxury retailer specializing in exclusive and emerging brands. Over 80% of its customers are millionaires and purchase from Neiman Marcus’ brands at least 25 times a year. The chain store connects with consumers globally via its e-commerce platforms and remote selling technology.
In Mar 2023, Neiman Marcus partnered with Ferragamo to expand its women’s ready-to-wear category with pop-up installations in seven stores. Neiman Marcus is the best alternative to Nordstrom for ultra-wealthy people. [10]
8. Saks Fifth Avenue
Year founded: 1867
Headquarter: New York City, New York
Saks Fifth Avenue is a luxury department store chain. The chain has over 12,000 employees and operates 42 locations.
In Jan 2023, the retailer opened the newly renovated men’s section on the seventh floor of the Saks Fifth Avenue flagship in Manhattan. It has 19 shop-in-shops from top men’s brands, including Bottega Veneta, Gucci, Celine Homme, Palm Angels, and Alexander McQueen.
Saks and Nordstrom compete in the luxury clothing sector. In Jan 2023, Saks Fifth Avenue renewed its commitment to the men’s business. The luxury retailer launched the invite-only Saks Man program and added over 125 new men’s brands to Saks.com, including Rhone, Loewe, Jacquemus, Junya Watanabe, Fair Harbor, Sease, and Alo Yoga. Saks Fifth Avenue is now one of the best alternatives to Nordstrom for men. [11]
9. TJ Maxx
Year founded: 1976
Headquarter: Framingham, Massachusetts
TJ Maxx is a leading department store chain that sells products 20% to 60% cheaper than department stores and retailers. In 2022, TJ Maxx had over 340,000 employees and 1,299 locations across nine countries.
TJ Maxx is one of the largest retailers of clothing in the US. The company combines several strategies to keep costs down, including buying excess inventory at a discounted rate and building low-frills stores.
As of Mar 2023, TJ Maxx had a team of over 1,200 buyers who source products from 21,000 vendors in 100 countries globally. TJ Maxx is a budget-friendly alternative to Nordstrom. [12]
10. Sephora
Year founded: 1969
Headquarter: Paris, France
Sephora is a multinational beauty retailer that features over 300 brands. It specializes in hair care, cosmetics, nail polish, fragrance, skincare, body products, and beauty tools. In 2022, Sephora had about 28,500 employees and operated around 2,600 stores in 34 countries globally.
The main competitive advantage of Sephora over Nordstrom is its partnership with Kohl’s. In 2020, Sephora partnered with Kohl’s to sell its brands via Kohl’s stores, and one million Kohl’s shoppers signed up for Sephora’s VIP Loyalty program within the first year.
In Aug 2022, Kohl’s opened Sephora shop-in-shops in 600 locations. The chain plans to expand Sephora’s presence across all its stores, making it the top competitor for Nordstrom in the beauty sector. [13]
11. JCPenney
Year founded: 1902
Headquarter: Plano, Texas
JCPenney is a department store chain with locations across 49 US states and Puerto Rico. The company started as a dry-goods store called the Golden Rule Store and evolved into the “King of the Soft Goods” in the 1950s. In 2022, JCPenney had over 60,000 employees and around 670 stores.
JCPenney nurtured a reputation as a customer-centric brand for middle-class consumers, but it declined in the 2000s due to stiff competition in the department store sector.
In 2020, JCPenney’s 14-year partnership with Sephora ended, and it filed for bankruptcy in May 2020. The business closed over 200 stores as part of its $1.75-billion restructuring program and now has the financial flexibility to compete against Nordstrom. [14]
12. Belk, Inc.
Year founded: 1888
Headquarter: Charlotte, North Carolina
Belk is a privately-owned department store founded by William H. Belk as The New York Racket. It serves customers through physical stores, belk.com, and a mobile app. In 2022, Belk operated around 290 stores across 16 Southeastern states.
Belk offers apparel, shoes, accessories, cosmetics, and home furnishings. The brand launched Culture Shop in 2021 to reaffirm its commitment to diversity, equity, and inclusion.
In Nov 2022, the company introduced the Inclusive Beauty collection with diverse-owned brands and products celebrating different skin tones, hair textures, ages, and genders. Belk is one of the top competitors for Nordstrom in the Southeastern states. [15]
13. Ulta Beauty, Inc.
Year founded: 1990
Headquarter: Bolingbrook, Illinois
Ulta Beauty is an American beauty retailer that serves customers via e-commerce and physical stores. In 2022, Ulta Beauty had over 40,500 employees and operated 1,343 stores.
Ulta and Nordstrom offer cosmetics, fragrances, skincare, and beauty products, but Ulta Beauty partners with Target to expand its market reach. In 2022, Target opened 250 new Ulta shops in its locations.
The beauty retailer launched 18 new stores in Q3 2023 and introduced a new layout to improve the shopper experience, making Ulta Beauty one of the best alternatives to Nordstrom for beauty products. [16]
14. American Eagle Outfitters, Inc.
Year founded: 1977
Headquarter: Pittsburgh, Pennsylvania
American Eagle Outfitters (AEO) is a leading global specialty retailer that owns American Eagle and Aerie brands. The company offers affordable, on-trend clothing, accessories, and personal care products. In 2022, AEO sold its merchandise in over 260 locations operated by licensees in 26 countries.
AEO operates over 1,300 stores across the US, Canada, Mexico, Japan, and Hong Kong., but it also ships to 81 countries globally via its websites. In 2022, the company released the first annual Building a Better World report highlighting ESG achievements through its Planet, People, and Practices initiatives.
The retailer recorded its second-highest holiday sales in Dec 2022, making American Eagle Outfitters a worthy alternative to Nordstrom for clothing and accessories. [17]
15. Ross Stores, Inc.
Year founded: 1982
Headquarter: Dublin, California
Ross Stores is an American chain of discount department stores. It is an S&P 500, Fortune 500, and Nasdaq 100 company that operates under the brand name Ross Dress for Less. In 2022, Ross had 1,693 locations in 40 states, the District of Columbia, and Guam.
Ross Dress for Less is the US’s largest off-price apparel and home fashion chain. Like TJ Maxx, Ross offers high-quality products for the entire family at 20% to 60% cheaper than other department and specialty stores. Customers can visit 322 Ross Discount stores in 21 states to increase savings. Ross Stores is an affordable Nordstrom alternative. [18]
References & more information
- Howland, D. (2023, Jan 20). Off-price Rack drags down Nordstrom’s holiday performance. Retail Dive
- The Associated Press (2023, Mar 3). Nordstrom says it will close its Canadian stores and cut 2,500 jobs. NPR
- Verdon, J. (2023, Mar 1). New CEO says Kohl’s doesn’t need ‘Total Overhaul.’ Investors may disagree. Forbes
- Martin, S. (2023, Jan 6). Macy stores closing: Four more stores shuttered in the latest round. USA Today
- Howland, D. (2023, Mar 10). More shakeup at Gap Inc. as sales fall, losses mount. Retail Dive
- RIN Staff (2023, Feb 22). Dillard’s full-year retail sales rose by 5% in fiscal 2022. Retail Insight Network
- Repko, M. (2023, Feb 22). Target bets on e-commerce by investing $100 million in hubs to speed delivery. CNBC
- PYMNTS (2023, Jan 5). Bloomingdale’s Embraces Retail Industry’s ‘Small Format Store’ Trend. PYMNTS
- Delesline, N. (2023, Feb 5). Neiman Marcus is laying off 5% of its workforce. Retail Dive
- Neiman Marcus (2023, Mar 13). Neiman Marcus expands to new categories, offering exclusive products and in-store activations with Ferragamo for luxury customers. PRNewswire
- Parisi, D. (2023, Jan 31). Amid layoffs, Saks Fifth Avenue sees the menswear business as a path to growth. Glossy
- Hanbury, M. (2023, Mar 3). TJ Maxx’s assortment of discounted brands is better than ever. Business Insider
- Holman, J. (2022, Aug 18). In Search of Growth, Kohl’s Expands Sephora Shops to All Stores. The New York Times
- Meyersohn, N. (2022, Nov 27). JCPenney was once a shopping giant. Can it make a comeback? CNN Business
- Belk, Inc. (2022, Nov 30). Belk increases the Diversity of Product Offerings with the launch of the Inclusive Beauty Collection. PRNewswire
- Kohan, S. E. (2022, Dec 2). Ulta Beauty Delivers Another Stellar Performance With Profits Up 28%. Forbes
- American Eagle Outfitters, Inc. (2023, Jan 9). American Eagle Outfitters Announces Fourth Quarter Revenue and Profit Tracking at the High End of Guidance. Business Wire
- Ross Stores, Inc. (2023, Feb 28). Ross Stores Reports Fourth Quarter and Fiscal 2022 Results. Business Wire
- Featured Image by Trac Vu
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