The economy is slumping and retailers, at least some, are still opening new store locations. Does that make sense and what will the push to open new units mean for retailers once the current downturn is history?
Nordstrom is among those opening new locations even as consumers curtail spending. The company plans to open eight locations this year including a new unit opening in Clinton Township, Mich. this Friday.
"These are very long-term commitments. Is this the exact right timing to open? That's not how we look at our real estate decisions," Erik Nordstrom, president of stores at Nordstrom, told the Detroit Free Press.
Nordstrom is opening new stores even though it expects sales to be flat to down two percent this year. Sales at the company's department stores open at least a year were off 11.4 percent in March.
"We remain very confident in our strategy. We are experiencing a downward cycle. These cycles happen periodically," Mike Koppel, chief financial officer at Nordstrom, said last month at a Bank of America conference.
"Our core customer is growing faster than the market. We're well-positioned to gain market share with that customer," Mr. Koppel said.
Discussion Questions: Is now a good time for retailers to be looking to build new stores? Do economic slumps, particularly those that have hit the real estate market, represent an opportunity for retailers? Does the process for site selection change during economic slumps?