NEW YORK, Sept 16 Shares of U.S. high-end
retailer Nordstrom could hit new heights, spurred by
double-digit growth of its online business and its popular
lower-priced Rack chain, Barron's financial weekly said on
The Seattle-based company's stock including dividend could
return another 15 percent in the next 12 months and rise to $75
in two years, Barron's said.
On Friday, Nordstrom's shares closed at $57.56, near their
all-time high, after rising 26 percent in the past year.
"Thanks to a wave of hefty investments, Nordstrom is
becoming a leader in e-commerce, and it's about to embark on an
even more aggressive strategy for its 39-year-old Nordstrom Rack
discount chain," the weekly paper said.
Nordstrom's Internet sales have grown three consecutive
quarters at a more than 35-percent clip, exceeding the forecast
growth of 12 percent for the industry, Barron's said, citing
figures from Forrester Research.
Online business accounted for 10 percent of Nordstrom's
overall sales and was expected to total $11.9 billion in the
fiscal year ending in January, the paper said.
To be sure, increased investment on technology for its
Internet venture has eroded its operating profits. The operating
profit margins fell almost 2 percentage points in the July
quarter to a three-year low, Barron's said.
Nordstrom plans to invest $1 billion, or a third of capital
expenditures, into e-commerce over the next five years, it said.
Another source of growth for Nordstrom has come from the
Rack, whose 113 stores made up 20 percent of total sales through
the first half of the year.
Nordstrom's plans to operate at least 230 Rack outlets by
2016, Barron's said.
Separately, it is expected to open a flagship store in New
York City in 2018.