Former Target CFO heads to Nordstrom

Dive Brief:

Cathy Smith, who was previously chief financial officer at Target, will be Nordstrom’s CFO as of May 29, according to a Wednesday filing with the Securities and Exchange Commission.
Smith most recently was CFO at Bright Health Group since 2020. Before Target, where she spent the five years until 2020, she had stints in that role at Express Scripts, Walmart International, Gamestop, Centex, Kennametal, Textron and Raytheon.
She replaces Michael Maher, chief accounting officer, who took the role in the interim after the December departure of CFO Anne Bramman. Maher, who arrived in 2009, is leaving to pursue other opportunities but will remain through June 16 to help facilitate a smooth transition, per a company press release.

Dive Insight:

Bramman left the chief financial role open at an unsettled time for Nordstrom. The department store is focused on an expansion of its Rack banner, despite steep declines compared to off-price rivals and Nordstrom’s own full-line stores. When the retailer announced her departure in October, William Blair analyst Dylan Carden called it a “setback.”

Smith will be responsible for financial planning and analysis, accounting, tax, internal audit, treasury, investor relations and strategic sourcing, per the release. In a statement, CEO Erik Nordstrom noted her 30-plus years of financial leadership experience.

"With her impressive record delivering business results at blue chip brands and deep expertise navigating a complex retail environment, we're confident she will be an excellent addition to our team and will help us achieve our growth priorities,” he said.

While Nordstrom is busy opening more Rack stores across the country, it has scaled back in some areas. The retailer isn’t renewing leases of its longtime full-line store in San Francisco or a nearby Rack, and has shut down its entire Canadian operation.

The retailer is also revamping its supply chain to improve inventory management, boost product availability and shipping speed, and improve Rack’s performance. After the April appointment of former Walmart executive Jason Morris as chief technology and information officer, Nordstrom underwent layoffs in its tech division.

In its most recent quarter, Nordstrom net sales fell 4.1% year over year to $4.2 billion, with full-line sales down 2.4% and off-price Rack down 8.1%. Digital sales fell 13.1%. Gross profit, as a percentage of net sales, contracted by 525 basis points to 33.2%, mostly due to higher markdowns as Nordstrom prioritized right-sizing inventory; ending inventory was down 15.2%. Net earnings tumbled 40.5% to $119 million.