Nordstrom reports 'historical highs' for theft-incurred losses

CEO Erik Nordstrom called it 'unacceptable' and said it 'needs to be addressed'

Nordstrom recently provided an update on the impacts it has seen from retail theft.

"Losses from theft are at historical highs," CEO Erik Nordstrom said Thursday evening while discussing the company’s second-quarter earnings results. "And I’d say we find it unacceptable and needs to be addressed. That being said, while it’s unacceptable, it is within our plans."

He noted the "shrink" that the company, which runs over 350 stores, has seen was "in line" with what it expected for the year. However, the "drag on earnings" from it "needs to come down," according to Nordstrom. 

US retail stores

Shoppers leave a Nordstrom store on May 26, 2021, in Chicago. (Scott Olson / Getty Images)

In the retail industry, shrink typically means theft and other types of inventory losses. 

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The Seattle-based company has "done a lot of things" and is "looking at everything" for store safety and security, in addition to addressing losses from theft, the CEO said. 

"There’s things within our control that we can invest in, but also involves partnering with local jurisdictions, law enforcement," Nordstrom continued. "I think the legislation is part of the mix, too, here that the whole industry needs to come to some of the better solutions on."

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JWN NORDSTROM INC. 19.26 -0.46 -2.33%

An analyst on the call had asked the retailer’s executives about their projections for shrink for the rest of the year, referencing a recent theft at a Nordstrom in the Los Angeles area.

Exterior of a Nordstrom location

A Nordstrom retail store in West Palm Beach, Florida, on Sept. 7, 2011. (  / iStock)

Roughly two weeks ago, the Nordstrom located at the Topanga Mall had a large amount of products stolen by a "mob of criminals," according to a social media post from the Los Angeles Police Department. The incident and the state of the store after it happened were captured on video, Fox News Digital reported

 The police pegged the losses the store suffered at $60,000 to $100,000.

"The safety of employees and customers is always a top priority," Nordstrom said to analysts and investors. "Certainly, what happened in our Topanga store is disturbing to all of us."

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The LAPD said Thursday it and other law enforcement groups making up an Organized Retail Crime Taskforce made nearly a dozen arrests "directly related" to several incidents, including the one that happened at the Topanga Mall’s Nordstrom. That task force has existed since Aug. 21, according to a press release. 

Nordstrom Inc

For the quarter, Nordstrom experienced a nearly 7.9% year-over-year decrease in total revenues, hitting $3.77 billion. It also brought in $137 million in net earnings, a widening from the $126 million seen in the same three months last year. 

Nordstrom Walnut Creek

Nordstrom in the upscale Broadway Plaza shopping center in Walnut Creek, California, July 30, 2017. (Smith Collection/Gado / Getty Images)

Shoplifting and organized retail crime have been hot button issues, with retailers like Kohl’s, Walmart and Target discussing them in recent weeks. 

On Thursday morning, Dollar Tree Inc. CEO Rick Dreiling said the discount retailer was taking a "very defensive approach" to shoplifting, adding it had "several new shrink formats" in the pipeline.

DOLLAR TREE TAKING ‘VERY DEFENSIVE APPROACH’ TO SHOPLIFTING, CEO SAYS

"It goes everything from moving certain SKUs [stock-keeping units] to behind the check stand," he said. "It has to do with some cases being locked up. And even to the point where we have some stores that can’t keep a certain SKU on the shelf just discontinuing the item."

FOX Business' Greg Norman contributed to this report.