Nordstrom executives shared details on the retailer’s acquisition of Trunk Club during the Q2 2014 earnings call, citing that the deal, including Trunk Club’s operating performance, would reduce earnings per diluted share in the 2014 FY by up to 5%.
However, Nordstrom’s quarterly results were on track with expectations; the retailer reported an increase of 6.2% in net sales versus Q2 2013. Total comparable sales for the quarter also increased 3.3%.
The Nordstrom Rack business also is improving, with net sales increasing $114 million, or 18%, year over year. This increase was attributed to incremental volume in existing store sales and the impact of 25 store openings.
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During the earnings call, Nordstrom reported that Trunk Club aligns with the retailer’s “strategic priorities” of creating a relevant customer experience and is a “high-growth company.” Trunk Club also is expected to “achieve operational profitability” and is expected to rake in more than $100 million in annual sales, according to the earnings report.
Nordstrom will acquire Trunk Club for $350 million in Nordstrom stock. The transaction also includes a long-term management incentive plan of up to $100 million based on Trunk Club’s performance. The transaction is expected to close in Q3 2014.
