Nordstrom Rack Opens in Manhattan

While years of site searches have yet to yield a suitable full-priced location in New York for Nordstrom Inc., the upscale retailer is going ahead to enter the coveted market with its smaller -- and more profitable -- Rack chain.

The 32,000 square-foot basement store, scheduled to open today, is expected to become one of the company's top-selling stores, said Geevy Thomas, president of Nordstrom Rack. It'll be the company's 76th Rack, compared to 114 for the full-priced chain.

Nordstrom plans to open 10 to 15 Racks, which average about 35,000 square feet apiece, each year, compared to its goal of two to three for the full-priced store, each averaging 140,000 to 160,000 square feet.


The discount units have been one of the industry's growth areas as shoppers become even more budget conscious in the recession. They help high-end retailers garner additional sales and profits by attracting different shoppers, acting as a channel to clear out merchandise from their full-priced locations and creating opportunities for stores to introduce pieces just for discount shoppers.

They also are often more profitable, because the stores don't have to pay for the same kind of intensive service and labor costs as well as the higher lease rates that often go with full-priced stores.

The Union Square opening also comes at a time when Nordstrom is outperforming its industry counterparts: The company last week reported a better-than-expected 7.5% increase in April same-store sales, while a majority of retailers came in short of forecasts for the month.

For the full store see MarketWatch.http://shop.nordstrom.com/c/6016611/0~2377475~6016611