The retailer acquired Trunk Club in 2014 for $350 million, just when subscription box services that offered customers personalized consultations were beginning to gain prominence. Over the years, however, Nordstrom struggled to make the service profitable. Just two years after acquiring the service, Trunk Club was devalued to $197 million as its projections for future growth and profitability were lower than initial estimates.
The devaluation came even as Nordstrom expanded Trunk Club’s services into womenswear in 2015. The company opened six physical locations for its bespoke styling service in recent years, but they were all shut down in 2020.
“I want to be clear. This move reflects our belief and commitment to styling and we are dedicated to growing and investing in these services,” said Chief Executive Officer Erik Nordstrom. “We have a range of styling services from low-touch outfit inspiration through our digital channels to a high-touch and personalized relationship with a stylist, all of which achieved high customer satisfaction scores. We are directing our investment towards these programs to ensure that we are well-positioned to serve customer needs and drive growth.”
In the first quarter, Nordstrom reported a net income of $20 million after reporting a loss in the same quarter a year ago.
