Sunday, August 3, 2014

Nordstrom's Trunk Show - Omnichannel Hard At Work


Purchase of the men’s personalized shopping website is the brick-and-mortar retailer’s latest digital shopping investment.

Nordstrom has confirmed a deal for Trunk Club, a personalized clothing shopping website aimed at men that represents the 113-year old retailer’s latest investment in e-commerce.

Announced Thursday, the deal’s terms were not disclosed, but the acquisition follows several other purchases and investments in recent years that have helped Seattle-based Nordstrom JWN expand its online presence. (Re/Codef irst reported on the talks between Nordstrom and Trunk Club earlier this month.)

The retailer, which is known for its upscale clothing and accessories, paid $180 million three years ago to acquire online flash sale site HauteLook. Nordstrom now uses HauteLook to host its own temporary private sales and the company also recently brought its well-known Nordstrom Rack clearance stores online with its own website and mobile app.

Nordstrom has also recently partnered with jewelry startup BaubleBar and previously led a $16.4 million investment in online men’s store Bonobos. The retailer also launched a partnership with online gift-giving service Wantful in June of last year, but that company suspended operations a few months later.

Buying Trunk Club appears to be Nordstrom’s latest effort toward offering customers a multifaceted online shopping experience. The five-year old startup sells around 100 brands – from Barbour to Rag & Bone – and offers personal stylists’ tips to men who would rather shop online than walk into an actual store.

Erik Nordstrom, president of e-commerce unit Nordstrom Direct, called Trunk Club’s business model “a natural extension” of Nordstrom’s business. “One of the pillars of our long-term growth strategy is to integrate the online and offline customer experience, and the personal styling space is a great example of how these two worlds are coming together,” Nordstrom said.

And, Nordstrom was likely no stranger to Trunk Club considering that the website’s CEO, Brian Spaly, also founded Nordstrom-backed Bonobos. Spaly told The New York Times that Trunk Club is on pace this year to double its revenue to just over $100 million.

Nordstrom’s shares dipped around 1% Thursday afternoon, but the company’s stock is up more than 13% on the year.

There could be more deal-making in the digital shopping sector coming up soon, as flash clothing sale website Rue La La has been reportedly exploring a sale. Interestingly, the one potential suitor to be linked to Rue La La so far isn’t a brick-and-mortar retailer, like Nordstrom, but rather rival online shopping site Gilt Groupe. (Gilt chairman and cofounder Kevin Ryan recently noted in an interview withFortune‘s Erin Griffith that traditional retailers have mostly been late to the game where flash sale sites are concerned.)

Trunk Club deal extends Nordstrom’s online shopping spree
Tom Huddleston, Jr. FORTUNE MAGAZINE

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Nordstrom is Buying Trunk Club
July 31, 2014 MR Magazine

Nordstrom announced this morning that it will acquire Trunk Club, the online retailer that connects men with stylists to create personalized wardrobes. The terms of the deal were not disclosed. Nordstrom says Trunk Club will continue to operate independently out of its Chicago headquarters “while leveraging Nordstrom’s capabilities and resources to scale its business.”

The acquisition confirms a rumor reported a month ago by the tech news siteRecode.
Trunk Club was founded by Brian Spaly five years ago after he left another innovative menswear business he helped start, Bonobos. Nordstrom led a $16.4 million investment in Bonobos in 2012 and now sells the brand in its stores and online. Spaly had already left the company by the time Nordstrom began its relationship with Bonobos.

Nordstrom acquired online retailer Haute Look in 2011 for $180 million in Nordstrom stock.
“What Trunk Club is doing in the personal styling space is a natural extension of our core business,” said Nordstrom Direct president Erik Nordstrom. “This acquisition is reflective of how we want to move quickly to evolve with customers by finding more ways to deliver a great shopping experience. One of the pillars of our long-term growth strategy is to integrate the online and offline customer experience, and the personal styling space is a great example of how these two worlds are coming together. We view this investment as complementary to our own business and our efforts to better serve customers.”

Spaly added, “Nordstrom is stellar at many of the things we aim to improve on to offer our members the best possible service: inventory management, planning and logistics are great examples. We knew that a partnership with the best-in-class retailer could significantly enhance our member experience and we are excited to have found a company that is such a natural fit with our culture and approach to customer experience.”

Trunk Club employs 250 stylists and operates showrooms in Chicago, Dallas and Washington, D.C. Most of its customers interact with stylists by phone and internet. Trunk Club sends its clients boxes of apparel; they send back what they don’t want and are charged for what they keep. Clients are not charged for shipping or stylist service, only the apparel.