Nordstrom’s Sales Growth and Liverpool’s Potential Collaboration
In the February-April 2025 quarter, Nordstrom reported a 3.4% increase in total net sales.
The Port of Liverpool has identified opportunities to capitalize on its recent investment in Nordstrom, including strengthening logistics capabilities by leveraging the economic and trade integration between Mexico and the US, as well as incorporating brands that are not currently part of its product offerings in Mexico.
“They have a complete logistics development in the US, and we do in Mexico. Given the economic integration between the two countries, there could be some opportunities in logistics, in general, and perhaps we can have some vendor training services on both sides of the border,” said Gonzalo Gallegos, Chief Financial Officer of the Mexican department store chain.
Merchandising and Collaboration Opportunities
In terms of merchandising, accessing new brands opens up new opportunities for Liverpool, one of Mexico’s leading department store chains.
The potential for collaboration, according to the executive, focuses on areas such as e-commerce, own brand development, loyalty programs, and customer service.
He highlighted that Nordstrom, a US-based department store chain, has a well-established e-commerce infrastructure and advanced data analytics, much like Liverpool.
For context, the US department store’s e-commerce participation represents 40% of its sales, compared to Liverpool’s 30%.
Nordstrom has private brands that develop “on their own” with most production in Asia. They also have a solid loyalty program that aligns with Liverpool’s upcoming relaunch, allowing them to gain insights from their partners’ experiences to enhance their offerings.
“In the short term, we are comparing what they do versus what we do to confirm if there are any opportunities,” Gallegos noted during a quarterly analyst call.
No Immediate Plans for US Expansion
Gallegos reiterated that, for now, the company has no plans to export the Liverpool brand to the US or bring Nordstrom to Mexico, neither in their full-store format, their discount format Nordstrom Rack, nor their online shopping channel.
Although it might seem like an obvious decision, Gallegos explained that the discussion is much deeper, as it involves adding value to the market, capital allocation, and other factors that make this decision “a complex discussion.”
“It’s a truly complex discussion. So, for now, we have no plans to bring either of these two brands to the Mexican market. And on the other hand, we’re not thinking about exporting the Liverpool brand to the US,” he emphasized.
He added that with this new investment, they expect solid returns through growth and dividends, as well as creating synergies for new growth opportunities for both department store chains.
Board Composition and Financial Benefits
With the new shareholding structure, Nordstrom’s board is now composed of seven members: three appointed by Liverpool, three from the Nordstrom family, and one independent director chosen jointly.
This ensures equal 50% participation in all crucial decisions, requiring at least one vote from Liverpool and one from the Nordstrom family to ensure balanced decision-making.
Moreover, the recent investment presents an opportunity for geographical diversification and generating cash flows in USD through dividends.
To put it into perspective, dividends collected by June amount to $9.2 million from this concept, and Liverpool estimates receiving an additional $17 million in USD during the remaining months of this year.
In the February-April 2025 quarter, Nordstrom reported a 3.4% increase in total net sales. Net income reached $49 million, marking a recovery from the previous year’s loss of $39 million in the same period.
As a result of its shareholding, Liverpool reported a contribution of MXN 144 million from Nordstrom’s profits in the quarter.
“Under the equity method, we anticipate recognizing a profit of approximately $210 million, representing 49.9% of Nordstrom’s net income from June to December. This profit already includes an estimated portion of the $80 million in acquisition-related expenses,” Gallegos informed.
