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Retail Analyst: Nordstrom's Decision Purely Business

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Retail Analyst: Nordstrom's Decision Purely Business

Nordstrom, Inc. (NYSE: JWN)'s decision to cease its business relationship with President Trump's daughter prompted a response from the president.

Nordstrom announced last week it will no longer carry Ivanka Trump's line of women's clothing, accessories and other fashion products. This prompted a response from Trump in a tweet which read, "My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person -- always pushing me to do the right thing! Terrible!"

Purely Business Decision

Richard Jaffe, Stifel's retail analyst, was a guest on CNBC to offer his take on the situation.

Jaffe knows Nordstrom's business practice very well and the company's main consideration is always about product, profitability and sell-through.

"This is normal turn," the analyst said. "Nordstrom changes their product seasonally, they change their brand seasonally - it makes it a more exciting place to shop and a more profitable business for shareholders. As an investor and an analyst, I wouldn't have it any other way."

Jaffe emphasized that Nordstrom is merely replacing under-performing brands with outperforming ones.

The analyst did, however, shy away from offering an analysis of the situation from a political point of view. From a retail analyst point of view, the endorsement of a product line from a notable member of the White House doesn't usually last long.

As an example, former First Lady Michelle Obama sported J. Crew dresses but the brand only saw a brief spike in interest among consumers for similar product lines and the excitement lasted just weeks and couldn't by itself support the brand.

 

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