Nordstrom's Grand Entrance in New York City

Nordstrom Opens Ambitious New Store in New York City

Nordstrom has opened a seven-story full-line store on the West Side of New York, marking a significant expansion for the department store chain. The new store represents a $700 million-plus market for Nordstrom in the city.

The new store, located across from the men's store on 57th Street, offers a range of hi-touch services, including styling, tailoring, and brand expertise. It also features brand-agnostic guidance in beauty, digital connections throughout the store, and food and beverage options, with seven restaurants and bars.

William Blair analyst Dylan Carden expressed concern about Nordstrom's investment in the NYC flagship store, citing dwindling returns and chronic margin pressure. However, Nordstrom's CEO, Erik Nordstrom, stated that the full-line store, Rack, Local stores are not separate businesses, but part of a knitted strategy.

Nordstrom has already operated six off-price Rack stores, a men's store, and two Local stores in New York. The company plans to open more Local stores in its top 10 markets next year, starting with Chicago, San Francisco, and Dallas ahead of the holidays this year. Additional Local stores are expected to open in Los Angeles, Washington D.C., Seattle, Boston, New York City, and Houston in the coming years.

The new store comes as traditional department stores face increasing competition from discount retailers like off-price retailers and Target. Lord & Taylor has been sold off to an online apparel rental company, and Barneys is currently in bankruptcy proceedings.

Despite these challenges, Doug Stephens, author of "Reengineering Retail: The Future of Selling in a Post-Digital World", commended Nordstrom for creating an ambitious and beautiful space with an emphasis on brands, selection, and services. Wedbush analysts see potential for synergies in customer spend for cross-platform/cross-price shoppers in Nordstrom's local market opportunity.

Nordstrom's full-line division has seen effectively flat growth in the last seven years, and the company did not consider setting up the full-line shop at Hudson Yards, a luxury retail playground that opened in March. However, the new store offers an opportunity for Nordstrom to tap into the lucrative New York market and attract customers who may eventually shop full price. Nordstrom expects a third of its Rack customers to eventually shop full price.

Customers can order drinks in dressing rooms and footwear areas in the new store, adding to the overall shopping experience. The new store is a testament to Nordstrom's commitment to providing a seamless and personalised shopping experience for its customers, even in the face of intense competition.