Nordstrom drops HauteLook, moves flash sales to Rack business

Nordstrom is phasing out the HauteLook brand it bought years ago and will move flash sales into its Nordstrom Rack discount store, the latest attempt to streamline the department-store chain.

HauteLook, known for its quickly expiring deals on clothing and accessories, will be integrated within Rack and its app, the company said on Thursday. Nordstrom didn’t provide a timeline for the shift.

“Our flash sales remain an important part of our offering and provide customers with newness and a sense of discovery,” Nordstrom said in a statement.

The company acquired HauteLook for $270 million in 2011, and the founder, Adam Bernhard, stepped down as the business’s CEO in 2013. Retail rivals have also dabbled in flash sales, including Canadian retailer Hudson’s Bay, which acquired Gilt Groupe in 2016 only to jettison the business within three years. Bed Bath & Beyond sold its home-decor flash sale site One Kings Lane last year.

In a presentation to investors, Nordstrom executives outlined a plan to massively expand its selection of products — particularly in what it calls “high-growth categories,” from just 300,000 choices now to more than 1.5 million items — aiming to shake off a slump that’s been exacerbated by the pandemic.

Chief Executive Officer Erik Nordstrom said on the webcast that the company is targeting $17 billion of annual revenue in the medium term, compared with $15.9 billion in sales during fiscal 2019. Rack will be a major part of this push as executives seek to grow the discount business by $2 billion in incremental sales in the long term.

The company sees revenue growing more than 25% in the current fiscal year. Longer-term, it sees that measure growing in the low single digits annually from 2019 levels.

Nordstrom saw a pronounced decline in sales last year, with the company expected to report its fourth consecutive quarterly decline when it reports final results for the year. Last month, Nordstrom said sales fell 22% during the nine-week holiday period that ended on Jan. 2.

The company is scheduled to report fourth-quarter earnings on March 2.