By guest author Robert Channick from Chicago Tribune
Nordstrom is closing all six of its Trunk Club stores, including the one in Chicago, and folding the fashion styling service into its nearby department stores.
The decision, announced during an earnings call Tuesday, comes five years after Nordstrom paid USD 350 million to buy Trunk Club with ambitions to grow the personal shopping business pioneered by the Chicago-based start-up.
“We are fully integrating our Trunk Club service to enable a superior experience for customers, drive more business and gain efficiencies,” Erik Nordstrom, CEO of the Seattle-based department store chain, said during the call. “Our plans include relocating clubhouse styling to nearby Nordstrom stores to reach more customers while continuing to offer our core Trunk-based services.”
Nordstrom took a USD 32 million charge during the quarter related to the integration of the Trunk Club stores, which are at 325 W. Ohio St. in Chicago, as well as in Boston, Dallas, Los Angeles, New York and Washington, D.C.
The Chicago store is set to close May 18, Emily Sterken, a Nordstrom spokeswoman, said in an email Wednesday, March 4, 2020.
Sterken declined to say how many people worked at the Chicago Trunk Club store, but said eligible employees not placed at a Nordstrom store would receive a separation package.
Founded in 2009, Trunk Club generated plenty of buzz with its high-concept service — packing professionally selected clothing in trunks to send to sartorially challenged men. The following year, Trunk Club opened its first store on West Superior Street in Chicago’s River North neighborhood.
After an initial round of funding in 2011, the fast-growing Trunk Club moved to its current River North location the following year and began expanding its retail footprint into other markets.
In 2014, Trunk Club was on pace to double its revenue to USD 100 million in sales when Nordstrom took notice and acquired the company, retaining then-CEO Brian Spaly. Nordstrom was looking to leverage its larger supply chains and infrastructure to grow the service even faster.
An early Nordstrom initiative was to expand the Trunk Club service to female shoppers in 2015.
But, in 2016, Nordstrom took a USD 197 million goodwill impairment charge, writing down Trunk Club’s value by more than half the USD 350 million it paid to buy it. Spaly left the company in January 2017. That same year, Trunk Club closed its Goose Island distribution center, eliminating 250 jobs.
Trunk Club sales grew 35 % in 2018, according to Nordstrom financial reports. While Trunk Club sales were not broken out for 2019, full-price retail sales, a category that includes Trunk Club, declined 3.5 % last year, according to Nordstrom’s fourth-quarter earnings report.
Nordstrom’s CEO said during the earnings call the company plans to integrate Trunk Club into the department store’s “styling ecosystem” this fall. It is unclear if the Trunk Club brand will survive the styling services merger.
“In terms of the Trunk Club brand itself, we’re still working through details of what this evolved styling will look like for our customers, and that includes branding,” Nordstrom spokeswoman Sterken said.