Nordstrom Looking to Rack Up Sales in NYC

As a New York City resident I would say...YES the concept and location will work. New Yorkers (all 8 million plus) are always looking for a good deal, and "The Rack" has things to offer that Filenes, TJ Maxx and Burlington do not. Hopefully it will be an upgraded Daffy's. The real question is would a regular Nordstrom's do well?

David Rich, President & CEO, ICC/Decision Services

The Rack will do well in NYC. But, it is a long-term strategic mistake. NYC doesn't know Nordstrom and the high quality department stores they run. The NYC introduction of the Nordstrom name will be associated with low-price selling. In the minds of those who make that initial association, the mainstream Nordstrom will always carry the lower priced, lower quality cache. If Nordstrom ever wanted to open in NYC, this move will kill that opportunity.

Gene Detroyer, Entrepreneur, Advisor, Consultant, Professor, Independent

NYC shopping experience is known world wide. This is a positive move and will attract many. Long time in coming.

Susan Rider, President, Rider and Associates, LLC

This is a smart and opportunistic move by Nordstrom. The key is real estate and that is always a challenge in Manhattan. They could not have picked a better location and the Rack absolutely fits the bill here.

Yes, New York is different and very competitive but Nordstrom is too. Those who bet against them don't fully understand what makes them so good and better than almost every other retailer out there.

Phil Rubin, CEO, rDialogue

Nordstrom Rack in Manhattan? Yes, yes. What took them so long?

It is amazing how long-standing company-wide beliefs stand in the way of obvious success. In this case the department store culture of Nordstrom argues that Nordstrom Rack only makes sense in the shadow of a department store. But it make sense to open a Nordstrom in Manhattan as it would in London, Paris, or Tokyo.

Does the Nordstrom family remember that the company first started selling footwear?

The Manhattan Nordrom Rack will have a broad selection of women's shoes at great prices in a city filled with overpriced women's shoes? That's a winner.

Bill Robinson, Principal Consultant, Bill Robinson Associates

Brilliant! About time.

Bob Livingston, CEO, REL Communications

Nordstrom should do well in NYC - they understand the value the shoppers want and deliver it with style.

Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

Having worked retail in New York for several years, I can say with some assurance that Nordstrom will do just fine in Manhattan.

The area they've chosen is a good one. Provided they can cut a good real estate deal (which they should), build a great store and give the service their reputed for giving, they should do well.

Their timing could be very good on this.

Doug Stephens, President, Retail Prophet

It will be huge hit. The Rack on State Street always seems busier than either Filene's Basement or TJ Max across the street. It may help that we have a Nordstrom on Michigan Avenue, a few blocks away, but I suspect most shoppers in Manhattan are savvy enough to know the difference between the company's offerings.

'ChitownShop'

I don't see any issues with opening a Rack in Manhattan now with full line Nordstrom to follow. It's a huge market with a broad demo and savvy shoppers. Obviously, location is key, but the company will do very well in the city with both formats.

Ted Hurlbut, Principal, Hurlbut & Associates

A few thoughts: What exactly is meant by "do well"? If one simply means (sales) revenue, then probably the answer is yes; but if one has to include that pesky other side (expenses), then the issue is more complicated: how issues like shrinkage, rent, labor, and marketing costs will play out is less clear.

I share Gene's concern about perception (though I think he overstates the case of New Yorker's ignorance of the Nordstrom brand); it is common--or at least it once was--for higher-end stores established in a market to expand down--the "bargain basement" angle--but quite novel for the opposite to occur (i.e. a lower-end store to add luxury "upstairs"); of course that really isn't the case here, since Nordstrom and Nordstrom Rack are essentially separate operations, but I think there's still a danger that people who fixate on the first word in the name rather than the last will be disappointed.

'notcom'

Given the recession, launching the Rack before the full-line store is a good strategy. Recession shoppers are looking for good buys on quality goods--Nordstrom Rack fits the bill. And I have to agree that shoppers are pretty savvy about brands, i.e., they know the difference between the two nameplates. And for those that may not, patronizing the Rack should help build brand loyalty that hopefully transfers to the full-line department store once it debuts.

Tim Henderson, Independent Retail Consultant, Independent

I too agree with Gene. Does Nordstrom Rack offer the legendary service experience that their full line stores are known for? No. I think it's a risk as it will be the defining store experience for those who never had the opportunity to shop at a full line Nordstrom and "get" the difference. Nordstrom and Saks shoppers trade down and find great value at the Rack and 5th Off, especially now. But, when Nordstrom opens a full line, will the Filene's, TJ Maxx, Burlington, and Nordstrom Rack customer trade up?

Marge Laney, President, Alert Technologies, Inc.

As a former New Yorker, I can definitely see a Nordstrom Rack as a very successful venture in NYC. New Yorkers love a bargain and a high-end bargain is even more attractive. Watch out Century 21--you may soon be the former "best kept secret in NY."

'PFloyd'

Oh, Please! New Yorkers are some of the most savvy people in the country and those who want a bargain will love the Rack and--by the way--New Yorkers travel and I am certain they have encountered the full line stores in locations such as Michigan Ave., or Pentagon City--or even Short Hills!

I think the Rack will do very well for Nordstrom and when Nordstrom finds the Right location and space--NYC will get a full-line store as well.

If L&T would have gone under then the Fifth Ave. location would have been the Manhattan Nordstrom.

William Passodelis, associate, ML Co.