Nordstrom’s ‘glow-up’: How going private is helping the retailer thrive as Saks Global languishes

If Pete Nordstrom has a pep in his step as he gives a tour of his family’s luxury department store flagship in Manhattan, it’s because he is starting to see signs that his executive team’s efforts to rejuvenate the 125-year-old retailer are working. Recommended Video As he walks the store’s street-level floor, he proudly shows off the recent overhaul of the beauty section: While Nordstrom still offers the decades-old department store counter service, it has added a lot of the self-service, discovery-centered style favored by shoppers at Sephora and its ilk. The beauty section still stocks the luxury brands you’d expect, but has added hip, less pricey items to help Nordstrom reach a wider clientele. “We thought, ‘Let’s create more authority,’” says Nordstrom, who serves as co-CEO with his brother Erik. “The store feeling good and feeling energetic is in large part because we’ve improved our beauty.” There are other signs in the store of Nordstrom finding its mojo again in the nearly one year since the family and a Mexican investor took the retailer off the stock market. There is an overhauled, much larger jewelry section on the same floor, as well as a two-level, design-y brand-showcase section called “The Gift Shop at The Corner” that changes every month, prominently placed at the busy intersection of Broadway and 57th. The glow-up at Nordstrom’s flagship, along with upgrades at many of its other 89 department stores and its resurgent discount “Rack” chain, has helped fuel the retailer’s return to form after some difficult years: In 2025, sales rose 7% to a record $15.9 billion, finally surpassing its 2019 high-water mark. Profits before income and taxes were at their highest in more than a decade. Just a few years ago, Nordstrom was struggling to get its footing back after COVID. Its Rack chain proved unable to compete well with other discounters including T.J. Maxx and Marshalls. The hard times squeezed Nordstrom and led to it compromise on some of high-end standards that had made the 125-year-old company such a beloved institution. Nordstrom’s discount “Rack” chain is finding its footing. Marie Uzcategui/Bloomberg via Getty Images The American department store is by no means out of the woods—but recent agita in the sector could play out to Nordstrom’s advantage. The bankruptcy filing by Saks Global , which owns Saks Fifth Avenue, Bergdorf Goodman and Neiman Marcus, has shaken the U.S. luxury market to its core—but Nordstrom stands to win market share among well-heeled department store shoppers if its strategy proves to be the correct one. “There is this huge opportunity in the market,” says consulting firm SW Retail Advisors president Stacey Widlitz. “There is also this opportunity for brands to partner with a retailer that is intact and doing the right thing when so much of the market is really incredibly unstable.” Risky bets and activist crosshairs Nordstrom was founded in 1901, when Swedish immigrant John W. Nordstrom and a business partner opened a shoe store in downtown Seattle after they struck gold in the Klondike. The company built a reputation for quality goods and customer service early on. During World War II, when leather was rationed, Nordstrom paid vendors upfront, rather than on credit as was the norm—a philosophy that still gives the company an edge. By the 1960s, Nordstrom had moved beyond shoes and into fashion; and by the late 1980s it had expanded its footprint from its Pacific Northwest and California roots to the East Coast. Nordstrom established itself as a well-appointed department store chain for the upper middle class with peerless customer service —and it thrived that way for years, eventually listing shares on the New York Stock Exchange in 1971 with the Nordstrom family remaining in charge of company. But it hit a rough patch a decade ago: Under pressure to grow from Wall Street at a time when all department stores were facing pressure from e-commerce and discount chains, the company plotted an ill-fated Canadian expansion and it vastly expanded its “off-price” Rack chain before it really figured out how to compete with T.J. Maxx. Adding to the financial pressure, Nordstrom spent years and several hundreds of millions of dollars (the company won’t say exactly how much) opening a flagship in New York City in 2019, only for COVID to stop its momentum mere months after opening. The pandemic felled other retailers on weaker financial footing—among them Lord & Taylor—and Nordstrom made it through, bruised and battered. But leaner times meant less staffing in stores and the resulting clutter and uneven customer service eroded Nordstrom’s luxe cachet. Post-pandemic, stores got cluttered and the chain let some of its famed customer service standards slip. “We’ve done some soul searching on that. The pandemic in some ways threw us off our game,” says Alexis DePree, Nordstrom’s operations chief. Wall Street was a punishing taskmaster, and as Nordstrom missed targets, it had little