It was big news back in 2012 when Nordstrom opened one of its Rack stores "a crosswalk away" from its flagship in downtown Seattle. Today, others including Neiman Marcus and Saks are opening outlets within walking distance of their flagships in an effort to increase sales.
When Nordstrom first opened its Rack location near its flagship in Seattle, the concern was that profits would be reduced as sales of full price merchandise were siphoned off through the sale of discounted goods.
At the time, the company said it had found that the two concepts were complementary to one another and that the strategy helped attract new customers to the Nordstrom brand through its outlets.
Then president of the chain, Blake Nordstrom, told The Seattle Times, "What we've learned is that our Racks do well when they're closest to our flagships."
According to a Wall Street Journal report, Saks plans to open a new full line store in downtown New York City in 2016. In 2017, it will open an Off Fifth outlet store a mere seven-minute walk away. Neiman Marcus is opening its Last Call outlets in cities such as Dallas, Houston and New Orleans where it has flagships.
While many still disagree with the concept of operating outlet stores in close proxity to flagships, Nordstrom has taken its view that the formats are complementary online. Back in May, the company launched nordstromrack.com. The new site and mobile app paired Rack merchandise with HauteLook flash sales events.