It was just a matter of time before Nordstrom decided to take its act to Manhattan. The chain announced that it will open its first location in the spring of next year at Union Square. As something of a surprise, the first Nordstrom in the city won't be a full-line department store but a Nordstrom Rack.
"They're doing what's right for the right part of Manhattan," Sam Poser, an analyst at Sterne Agee & Leach, told The Seattle Times. "It's a more moderate shopping area than Park Avenue."
Mr. Poser said the location should do considerably more business than the $16 million he estimates is generated by the average Rack location. "There's a ton of traffic because subways go through there, and a lot of people live and work in the area."
Nordstrom typically opens full-line stores before opening Rack locations. The company thought it had a deal a few years back on Park Avenue, but it fell through when the developer had financial issues.
Brooke White, a spokesperson for Nordstrom, said the company is still looking for a suitable location to open a department store in the city.
"Manhattan real estate is very hard to come by," she told The Seattle Times. "With a Rack, there were more options available to us, and we wanted to not pass this opportunity up."
Consumers in Manhattan won't be confusing the Rack location with the chain's department stores. "People understand this is a Nordstrom Rack and not a Nordstrom store," Ms. White said. "People get that there's a difference. New York City consumers are pretty educated people."
Discussion Questions: Will Nordstrom be successful with its Rack format in New York City? Is there any concern that the company is leading with a Rack instead of a full-line department store?