Nordstrom said Thursday it will spend $350 million to purchase Trunk Club, a personalized online shopping service for men, as it seeks to expand its turf in the fast-growing market of internet retail.
A portion of the money is conditioned on retaining Trunk Club executives and will vest in the future. The deal also includes a long-term incentive plan of up to $100 million, and will allow Trunk Club to operate as a stand-alone unit. The acquisition was announced last month.
The company also reported earnings of $183 million, down from $184 million in the same period last year. Sales, however, rose to $3.3 billion from $3.1 billion, not including credit-card revenue.
Like many brick-and-mortar retailers, the Seattle-based department-store giant has been coping with shoppers’ increasing embrace of online commerce.
Analysts point out that Nordstrom has been more successful than most of its peers, thanks to perks such as free shipping and a wide diversity of items available in its online stores.
So-called direct sales for Nordstrom, which represent mostly nordstrom.com and exclude sales made at Haute Look and nordstromrack.com, rose 22 percent in the quarter. Meanwhile, sales for the company’s full-line stores declined 1.2 percent.
Following the earnings report, Nordstrom shares dropped $2.74, or 4 percent, to $65.95 in after-hours trading.