In a stunning move Monday, the four Nordstrom family members who run the huge retail chain kicked themselves upstairs, leaving the helm in non-Nordstrom hands for the first time in the company’s 94-year history.
Boosted into the co-chairmen’s seats are Ray Johnson, 53, and John Whitacre, 42.
But the surprising switch of controls apparently won’t leave Nordstrom to be run by nonNordstroms for long: As part of the sweeping change, six fourth-generation Nordstroms, all in their 30s, were named co-presidents.
For the past 27 years, Bruce, 61, John, 58, and Jim Nordstrom, 55, plus brother-in-law John McMillan, 63, have operated the rapidly growing Seattle-based company as co-chairmen. The four said Monday that they will vacate the co-chair posts but remain Nordstrom directors. The four will serve as the company’s executive committee. Jim Nordstrom will chair the committee.
“There has been a real interest on the part of the senior Nordstroms to slow down,” said Lesa Sroufe, research director at the Ragen MacKenzie securities brokerage in Seattle. “So I’m not terribly surprised. Ray Johnson and John Whitacre are obviously seasoned executives. It was important that they stay on in important roles.”
Johnson and Whitacre were named copresidents in 1993, along with two others who have since left the company.
With Johnson and Whitacre climbing to the senior-most level, the president’s slot opened. To fill that, the senior Nordstroms tapped six offspring, the youngest 31, the oldest 34.
They are, with their father’s name in parentheses: Jim A. Nordstrom (John), 33; Dan Nordstrom (Jim), 32; Bill Nordstrom (Jim), 31; Blake Nordstrom (Bruce), 34; Pete Nordstrom (Bruce), 33; and Erik Nordstrom (Bruce), 31.
Setting the succession is critical to a company’s future. Sroufe said one of the most common questions of major investors has been who will run the company after existing management is gone, so settling that is a plus.
She said naming all family members to copresidencies has advantages.
“It gives the generation time to see who may likely become the spokesman or move up.”
On the other hand, Sroufe said, by naming only Nordstroms to the president’s post, managerial material of similar age may be discouraged.
But having so many senior executives may not be a drawback, said Dorothy Lakner, an analyst with Oppenheimer & Co. in New York.
“Nordstrom has a track record of management by committee,” Lakner said.