It's lonely at the top.

While there are certainly plenty of high-end boutiques in places like New York and L.A., there aren't a lot in the way of publicly traded companies catering to high-end retail customers. Neiman Marcus went private, Bloomingdale's is part of Federated (NYSE:FD), and Saks (NYSE:SKS) is still struggling with its flagship brand. That leaves Nordstrom (NYSE:JWN) in a rather interesting position as one of the few direct plays in the sector.

Adding to its attraction as a sector play, Nordstrom continues to perform fairly well. Sales this quarter were up 8% on nice 5.4% comparable-store growth. And though the women's business seems to be underperforming, good results in accessories, cosmetics, and men's all helped to compensate.

I'm also satisfied with how Nordstrom is doing on the operational side. Gross margins were up a bit despite ongoing markdowns in the women's category, and operating income rose 19% for the quarter. Inventory turnover continues to improve (a byproduct of technological investments that the company was originally slow to make) and that should continue to support returns and cash flow.

Speaking of returns, I was gratified to hear that the company is now incorporating return on invested capital in its evaluation (and presumably compensation) of management. This certainly doesn't guarantee better performance or fair compensation, but it's a step toward better aligning the interests of long-term holders with those of management.

Even granting the risks of an economic slowdown, I don't think Nordstrom is too expensive. Plus, I like what seems to be a managerial philosophy centered around incremental improvement and patient organic expansion. I'm not necessarily convinced that this is a great time to be investing in retail, but I don't think I'd be in a tremendous hurry to check out of Nordstrom.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).