Then, when he turned 16, he packed
his bags and left his home and family to move to America — arriving
with only $5 in his pocket. This is the story of how Nordstrom
became a top luxury retailer in the United States, carrying designer
brands like Gucci, Burberry, Prada, Off-White, and more. The story of Nordstrom begins in Lulea,
a small town in the very north of Sweden. There, in 1871, John Nordström was born. John was the middle
child of five children. His childhood in Sweden
was harsh and difficult. John’s father, Nils, was a
blacksmith, wagon maker, and farmer. He died when John was only eight
years old, leaving John’s mother, Katharina, to run the farm and
raise the family by herself. Three years after his father’s death,
John’s mother took him out of school when he was in the sixth grade. He had to work on the
farm to help his family. His mother expected him to be
able to do as much work as his brother, who was 10 years older. John was very unhappy during this time. “I often cried when I had trouble
doing things she expected me to do, and couldn’t, and felt very
helpless,” he later revealed. After five years of farm work, John
packed his bags to leave his family and hometown forever with all the money
he had, a little over $100 dollars. He was only 16-years-old. Before we get into the next part of the story, we would like to quickly thank our sponsor, Morning Brew. Do you often find business, finance or tech news confusing? Well, you’re not alone. According to a survey, more than half of Americans find the news more confusing than educational due to the overwhelming volume and speed. Fortunately, today’s video sponsor, Morning Brew, has a daily newsletter that makes it easy to follow the most interesting business, finance, and tech news, like why the time to go after your dream job is now. Plus, you can get a hold of the top stories in just five minutes, so you won’t feel left behind when they come up amongst colleagues or friends. It’s completely free to sign-up and only takes 15 seconds. Don’t miss out by clicking the link in the description box today! It was the peak of the wave of
Swedish immigration to America. John and two of his friends headed
for the Pacific Northwest, a popular destination for Swedish immigrants. The three travelers began
with a two-day boat trip to Stockholm, the capital of Sweden. It took another three days to
travel to a seaport from where they could sail to England. In England, John boarded a train for
the first time to get to Liverpool. From there, he and his friends
could find passage to America. It was a 10-day journey to New York, where
they bought train tickets for Michigan. At this point, John only had
five dollars left in his pocket. Many American immigrants worked
in demanding labour jobs, and John was no exception. His cousin got him a job loading iron ore. He would lift the iron into a wheelbarrow,
push it to a platform a hundred feet away, and empty it into railroad cars. For 10 hours of heavy work, John’s pay was
only one dollar and sixty cents, and he nearly lost his life in an iron ore slide. Over the next few years, John made his
way west while working backbreaking jobs. He worked as a coal digger,
a railroad worker, a gold and silver miner, and a logger. The conditions for labour workers were
harsh and dangerous, and John had to share a bunk in a camp that smelled
of horses and was brutally cold. He would often wake up with his hair
frozen and lice bites on his body. But despite the bleak lifestyle and
prospects, John used his determination and strength to push forward. He eventually ended up in Seattle working
at a sawmill and was paid even less than before, one dollar and fifty cents a day. John also witnessed a tragic
accident while working. His partner got caught on a tree
and was dragged down a long drop. John could do nothing to help as the
man passed away right before his eyes. After two brushes with death,
John realized it wasn’t worth working such risky jobs anymore. Fortunately, he had some savings put
aside and managed to buy 20 acres of land in Arlington, Washington,
only fifty miles away from Seattle. There, John returned to his family’s
roots and began a potato farm. The land in Arlington was ideal
for potatoes, but the river flooded often and made the ground too wet. For years, immigrant farmers
drained and worked the land to make it perfect for potato crops. John wound up being one of the farmers
who benefited from their efforts. Around this time, John even
met someone special, another Swedish immigrant, Hilda Carlson. It wasn’t long until the two began dating. Still, John didn’t settle down to enjoy
his new life in Arlington for much longer. One morning, he picked up a
newspaper and read a headline that would bring him back on the road
and completely change his life. Gold was discovered in the Yukon! John, like thousands of others,
jumped at the opportunity and hopped on a train to Klondike. This was his second long journey
in search of a brighter future, but this time he went alone. From Seattle, John rode on a
crowded coal ship to Alaska. He had a second-class ticket and
slept with the mules on this ship. John made the rest of the way by horse
and on foot, and almost froze to death. He had only a pair of cheap
shoes, which gave him very little protection from the Alaska cold. At one point, he nearly froze to death
and had to eat his horse for food. Once finally in Klondike,
John got to work digging. It was here that he met Carl
Wallin, a fellow Swedish immigrant and gold rush adventurer. After two years of hard work
and searching, John struck gold. But trouble arose when another miner
argued against his claim to the gold. During the gold rush, there were a
lot of arguments about land claims as everyone fought for the promise of riches. Unfortunately for John, the other
miner’s brother was the Local Land Commissioner, who would make the
final decision in the legal argument. Though he had worked the land for two
years and the gold would make him rich, John knew he would probably lose if
he tried to fight an unfair battle. Instead, John decided to settle
and accept an offer of $30,000 in exchange for his claim. He split the money with two of his
partners and returned home with $13,000 dollars in his pocket. John reunited with Hilda and the
couple got married within a year. He also bought some property in
Seattle and built two houses. Business was thriving in
Seattle and the population had doubled in the past 10 years. Seattle was one endpoint of the
Great Northern Railroad, which would connect the whole country. Everyone moved there, hoping to
make money once the railroad could bring in a steady flow of people. When news of the gold rush came,
Seattle boomed as thousands of people arrived on their way to Alaska. While passing through, they gave
a lot of business to hotels and restaurants and boosted the economy. They bought tons of supplies to
last them up north, from food to winter clothing to equipment. Now 29 years old and married,
John was looking for a business opportunity to invest in. He reconnected with Carl, the Swedish man
he met in Klondike while panning for gold. Carl was a shoemaker who
owned a small shop in Seattle. John would visit him often at the
store, and one day Carl suggested that he and John go into business together. They decided to open a shoe retail store. John invested four thousand dollars
to expand Carl’s location and buy inventory for their business. The next year, the partners
opened Wallin & Nordstrom on Fourth and Pike Street in Seattle. It was a small, 20-foot shop. Both partners had no retail experience
and spoke very little English. On their first day, no customers
arrived in the morning, and Carl headed out for lunch. As soon as he left, a woman came
by the store, admiring a pair of shoes in the front window. Unlike his shoemaking partner, John
had no experience fitting shoes. John was nervous. He looked in their inventory, but couldn’t
find the style the woman wanted anywhere. He was ready to give up when he decided
to take the shoes from the window display and sell them to the customer. John never found out if the shoes
fit, but the woman bought them anyway. That was Wallin & Nordstrom’s
first sale ever. The total revenue from their
opening day amounted to only twelve dollars and fifty cents. The Seattle shoe business was competitive. There was a fashion shoe store down
the street from Wallin & Nordstrom, and others were selling winter
boots for only three dollars. John and Carl’s shoes ranged from
one ninety-five to four ninety-five. At first, the store only
stocked medium-width shoes. But the shop had a lot of Swedish
customers, who needed larger shoes than the average American. The partners noticed this and
began keeping larger widths and sizes in their inventory. This began the company’s reputation
for having many options to suit their customers’ needs. The store focused on
customer service and quality. They offered many practical
shoes rather than fashion styles. John noted customers’ feedback every
day and would write down when they wanted something the store didn’t
offer, to make sure the store had what they wanted in the future. By the end of their first summer,
business was steady at Wallin & Nordstrom. The partners took home
seventy-five dollars a month, and on busy days they sold over one
hundred dollars worth of shoes. After four years in business, the
store’s yearly revenue reached forty-seven thousand dollars. John and Carl also expanded their business
and relocated to a larger space downtown. John was also raising his
family during this time. He and Hilda had their first child,
Everett, only a few years after Wallin & Nordstrom first went into business. Their second son, Elmer, was only
one year younger than Everett. Lloyd, the third and youngest son in the
family, was born six years after Elmer. All three boys began working in
their father’s store at age 12. After two decades in business,
Wallin & Nordstrom decided to open a second location. They took out a ten thousand dollar loan
from the Scandinavian American bank. John had used both of his houses
and his property to secure the loan. The second store was in the
University area, where all three Nordstrom sons would go to school. At 20 years old, Everett had just
graduated from business school and was put in charge of the second store. Unfortunately, this phase was the end
of the road for Wallin & Nordstrom. After almost 30 years of working
together, John and Carl’s relationship had gone downhill. They did not see eye-to-eye on business
decisions and officially parted ways. John sold his share of the company
to Everett and Elmer for one hundred and twenty thousand dollars when
they were only 26 and 24 years old. The next year, Carl decided to sell
his share to Everett and Elmer as well. He saw that John was out enjoying
life away from the business, and wanted to do the same. Together, the Nordstrom brothers
expanded and modernized the business. They doubled the store’s size, reorganized
the layout, and redesigned the inside. They also changed the name from “Wallin
& Nordstrom” to simply “Nordstrom.” Unfortunately, hard times
were ahead for everyone. Black Tuesday and the Great Depression
hit and prices for everything dropped. After the stock market crash, everyone
hung on tight to the money they had. Customers watched prices falling and
held off on buying shoes, waiting for prices to go down even more. Lloyd joined the family
business during the depression. Not wanting any handouts, he asked how
much it would cost him to buy a share of the company like his brothers had. Everett and Elmer went to their
accountant, who told them that Nordstrom now had zero value so Lloyd
joined without paying a single penny. Prices were so low that Nordstrom had to
sell twice as many shoes to break even. The brothers agreed that
the most important thing was their father’s security. John’s worth was all in the business and
he did not have much money, so Nordstrom going out of business would ruin him. But business got so bad that
the brothers believed they would have to close the store. They decided to hang on
for a little while longer. The next month, they saw an increase
in sales that kept them alive. Despite the circumstances, the brothers
worked together to overcome the challenges and make the best of the situation. Everett, Elmer, and Lloyd also all
got married during the depression. Ten years after taking over the business,
the brothers made a big mistake. They were so busy during the holiday
season that they missed the deadline to renew the lease on their store. Their landlord said that he planned
to increase the rent by a lot, so the brothers found another
location and moved the store. Everyone thought it was risky, as they
were moving from the middle of a busy shopping area to the edge of downtown. But the move ended up giving Nordstrom
more opportunities to expand. Every time that space opened up in
their new building, they went for it. When it was time for Nordstrom to
become an incorporated company, the brothers had a dilemma. They needed to create formal titles:
President, Vice President, and Treasurer. But they always shared their
work as a team and wanted to be equals in the business. Everett, as the oldest, was
offered the role of President. He decided that he would do
it, but only for two years. The three brothers decided they
would rotate the roles every two years to keep things fair. Everett, Elmer, and Lloyd were
good partners who understood each other’s strengths and weaknesses. They resolved business issues
quickly and pretty much always agreed on important decisions. Together, they managed to make all their
payments on time during the depression. Then the Second World War came. Seattle was in blackouts as
they feared being the target of an attack from the west coast. Air sirens went off and people
would turn off the lights and cover their windows all day. Eventually, the city determined
they were safe for now, but the war had officially arrived. As the family’s youngest son, Lloyd felt
it was his responsibility to contribute to the war effort and he joined the Navy. During the war, Nordstrom had to
use ration stamps to stock shoes. Customers were only allowed
three pairs of shoes per year. Inventory became very difficult
for the store to secure. Half of the manufacturers’ production
had to go towards the war effort, and all the country’s leather
supply went to the military. The soles of shoes were replaced
with rubber in place of leather. The brothers traveled across the country
to hunt down shoes and offer the quality and variety Nordstrom was known for. They went to shoe conventions and met
with manufacturers, and one time prepaid thousands of dollars to convince a
manufacturer to take them as a client. Postwar, Nordstrom focused on expansion. The brothers agreed that either the
company had to be large enough to support all three of their families,
or it would support none of them. They leased space in Northgate, one
of America’s first shopping malls. It was an entirely new concept for
a company to rent out one of several spaces in a big shopping center. They would be in the suburbs
instead of an urban center, in a location full of competitors. Many people doubted the venture,
including John, but malls ended up being the future of retail. Over the next 10 years, Everett, Elmer,
and Lloyd doubled the size of their main location, opened several more stores,
and leased 12 more shoe departments. Nordstrom was now the biggest
shoe chain in the country. The company had achieved almost
everything it could as a shoe store in the Pacific Northwest. The brothers decided that the next step
would be to expand into selling clothing. Lloyd led the charge, and Nordstrom
bought Best Apparel Inc., a top women’s fashion retailer in Seattle. The company’s revenue tripled
within six years, with half of its sales coming from clothes. This was the last phase of Nordstrom’s
journey that its founder lived to see. John passed away during
this time at age 92. Before his death, the shoe industry
had recognized John’s achievements by naming him “Shoe Man of the Century.” When Everett and Elmer turned 65, the
brothers began to think of retirement. Almost all of their net worth was
in the company, so they spoke with potential buyers to sell Nordstrom. By then, Everett’s son Bruce
Nordstrom, Elmer’s sons John and Jim Nordstrom, and Lloyd’s son-in-law Jack
McMillan all worked in the company. When they heard their fathers were
thinking of selling to outsiders, they came up with a plan to
keep the business in the family. The brothers weren’t sure that the
third generation could work together as well as they had to run the business. But Bruce, John, Jim, and Jack
came together to convince their fathers to let them take charge. They gave a presentation with their
goals outlined and a road map. They were honest about their
strengths and weaknesses. The brothers were impressed with
their sons’ dedication and enthusiasm. The plan worked. But there was a problem. The brothers didn’t have
much money to retire with. Their value was almost all in
the business, and they were no longer selling the company. There was only one solution. Nordstrom went public, and people were
able to buy shares in the company. This was very out of character for the
family, as they were known for being private and quiet about their business. When it went public, the company’s
stock sold out in one day. The brothers each sold one hundred
and forty seven thousand shares of the company and officially retired. They remained on the board as
co-chairman, but the business was firmly in the hands of the next generation. In that fateful presentation, the third
generation had made a big promise. They predicted that with them in
charge, Nordstrom’s sales would reach 100 million within 10 years. Ten years later, the revenue ended up
being almost half a billion dollars, five times the amount they estimated. The new leadership focused on expanding
Nordstrom to the rest of America. The company had a strong presence
in the Pacific Northwest, but it was unknown in the rest of the country. Expanding to large, already
competitive markets was seen as risky. Nordstrom began their
country-wide expansion by opening three locations in Alaska. But the big goal was California. California was a sophisticated area with
many options for fashionable shoppers. The family knew they couldn’t
compete using exclusive styles or the most beautiful locations. They had to make a name
based on customer service. It was important that they hire the right
manager for this store, which represented their first expansion into the South. The man they offered the position
to turned it down because he didn’t want to move his family. Betsy Sanders, Nordstrom’s only
woman manager at the time, was offered the management role. She jumped at the opportunity. The store ended up being a huge
success, and Nordstrom continued their expansion, opening 24 more
stores within the following decade. Under the third generation, Nordstrom
became America's largest specialty store chain and made the Forbes 500
list of the country’s largest companies. The company also went to the eastern
United States, opening their first East Coast store in Virginia. After years of successful growth, it was
almost time to pass down ownership again. But the fourth generation of
Nordstroms was still quite young. The company brought in experienced
non-family members to be co-presidents. But after a few years of lackluster
revenue and profits, as well as legal troubles with unions and
lawsuits, two of the co-presidents were asked to leave their roles. The company was led by John
Whitacre and Ray Johnson. By now, the fourth generation of the
Nordstrom family was ready to step up. This new generation was made
up of six brothers and cousins, all 31 to 34 years old. After they took the reins, the company
began online retail, a venture that brought in 215 million in its first year. Unfortunately, things
remained rocky overall. Two of the Nordstrom family
members left to pursue other paths. The company’s earnings
did not bounce back. Sales were down, and shoppers became
bored with the company’s clothing options. Nordstrom tried to attract new young
shoppers and improve the company’s sales. They launched campaigns to renew
interest, but it backfired. The company’s older
shoppers felt forgotten. Historically, Nordstrom prioritized its
employees as the most important group of people, right after the customers. But now the employees felt unimportant,
and they were losing their passion. People wondered if the
company would be sold. Its earnings were down, and
the value of the company shares dropped by more than 50%. Analysts said Nordstrom no longer
understood the needs of its customers. The Nordstrom family realized they
had to go back to their roots. The family company was created
on a simple principle, to take care of the customer first. And the people who knew the most
about the customers were the employees that spoke to them every day. Many changes came at once. John Whitacre, the company’s chief
executive, and Marty Wikstrom, its president, both left. Blake and Pete Nordstrom,
Bruce’s sons, replaced them, and Bruce returned as chairman. The Nordstrom family was
running the show again. Some analysts doubted that the
young Nordstroms were experienced enough to turn the ship around. They ranked the company’s stock
lower when these changes came in. People said that large, successful
companies could not succeed if they were running like a family business. Under Blake, Peter, Erik, and Bruce’s
leadership, Nordstrom stopped focusing on expanding and paid more attention to its
customers, employees, and existing stores. The company also invested into
managing their inventory better and upgraded to new computer systems. Despite what some analysts thought about
the Nordstrom family’s potential, the company thrived with them in charge. Nordstrom recovered within a few years,
and its sales remained steady when other competitors were struggling. Blake, Peter, Erik, and Bruce
Nordstrom were named Executives of the Year by one business journal. The company went international
when it opened locations in Canada and Puerto Rico. Nordstrom also expanded into selling
accessories, home goods and gifts. Today, Nordstrom is known for being
a top luxury retailer offering major designer brands like Gucci,
Burberry, Prada, Off-White, and more. The company also regularly makes the
Fortune 500 list and the magazine’s list of the 100 Best Companies to Work For. This is the story of how a 16-year-old
farmer arrived in America with only five dollars in his pocket. He couldn’t speak English and
only had a sixth-grade education. With a lot of perseverance and
hard work, he found a way to open a small shoe store in Seattle, and
raised a family that helped turn it into a billion dollar chain. For more inspiring stories and advice
from today’s most successful leaders, don’t forget to subscribe to our channel!
