Nordstrom to integrate Trunk Club ops, cut jobs

Nordstrom Inc. plans to more closely align operations of its omnichannel Trunk Club business with the rest of the enterprise.



The luxury retailer plans to close the dedicated Trunk Club fulfillment center located on Goose Island in Chicago. With the closure, Trunk Club will integrate its operations into the Nordstrom network of fulfillment and distribution centers located across the U.S. The Goose Island facility will transition to its close by August 2017.



Acquired by Nordstrom in 2014, Trunk Club is headquartered in downtown Chicago and serves customers both online and through its five clubhouses in Chicago, Dallas, Washington, D.C., Los Angeles and New York. The service pairs customers with personal stylists who curate apparel orders for them.



"As Trunk Club has grown significantly over the past several years, we're continuing to find opportunities to support that growth while also giving our customers the best experience possible," said Brian Spaly, CEO of Trunk Club. "While our space at Goose Island has served us well, we realize we're going to outgrow it soon. We decided this was the right time to integrate Trunk Club orders into the Nordstrom fulfillment network, which will allow us to share more of their inventory and better serve our customers with a wider mix of merchandise."



The Goose Island closure will impact about 250 full- and part-time employees. Nordstrom says it will work to help employees interested in staying with the company find roles at the Trunk Club Chicago clubhouse or at nearby Nordstrom and Nordstrom Rack stores.



Nordstrom has three fulfillment centers, located in Elizabethtown, Pennsylvania; San Bernardino, California; and in Cedar Rapids, Iowa. The Cedar Rapids facility currently fulfills all orders for Trunk Club for Women, which launched fall 2015. Integrating the rest of the Trunk Club business into the Nordstrom network will begin at the end of 2016.



This move follows a recent decision by Nordstrom to postpone the planned opening of a West Coast fulfillment center dedicated to fulfilling digital orders until 2020 or later. E-commerce accounted for 20% of Nordstrom’s sales in its most recent fiscal quarter, and the company has said it expects online sales to represent 30% of its business by 2020. The company also recently moved to make its loyalty program omnichannel.



However, Nordstrom also admitted to analysts in March 2016 that the costs of fulfilling online orders was cutting into profits. Presumably by consolidating Trunk Club fulfillment and eliminating inventory silos, the retailer will make the service more profitable and help control e-commerce costs.