Business Strategy and Outlook| David Swartz |
Nordstrom continues to be a top operator in the competitive U.S. apparel market. The firm has, in our view, cultivated a loyal customer base on its reputation for differentiated products and service and has built a narrow moat based on an intangible brand asset. While the company was unprofitable in 2020 because of the COVID-19 crisis, its profitability returned in 2021, and we believe its brand intangible asset is intact. Despite a rocky couple of years, we believe Nordstrom’s full-price and Rack off-price stores have competitive advantages over other apparel retailers.