Nordstrom to Fill Mall Anchor Vacuum
By George Anderson
He probably didn’t realize it more than 2,300 years ago when he said, “Nature abhors a vacuum,” but Aristotle could just has well have been speaking about the retailing business.
Federated Department Stores’ announcement earlier in the month that it would close 68 mall locations is prompting speculation on which stores will move in to fill the vacated
locations and which businesses stand to benefit from Federated’s integration of the May Department Store chain into its business.
A report in the Cincinnati Business Courier says Nordstrom is a likely beneficiary for two reasons: 1) It will probably see increased traffic in stores that it presently operates that are near the closing locations and 2) it will have the opportunity to open new stores in prime real estate vacated by Federated.
Nordstrom currently has 12 stores in malls where Federated has announced its intention to leave. That means Nordstrom has 56 potential anchor locations to bid on.
Neely Tamminga, senior research analyst for Piper Jaffrey, said that moving into an existing anchor and remodeling could cut the amount of time Norstrom requires to open a new store in half.
Nordstrom’s chief financial officer Mike Koppel indicated the chain was looking at opportunities to expand made possible by the Federated/May merger.
Two markets that are thought to be likely targets for Nordstrom are Boston and Pittsburgh. According to the Cincinnati Business Courier piece, Nordstrom has its first store opening planned for Massachusetts in the Boston suburb of West Natick. The location is due to open in 2007.
Moderator’s Comment: What opportunity does the Federated/May merger provide to Nordstrom? Aside from Federated itself, which retail chain stands to benefit
the most from the Federated/May merger? –
George Anderson – Moderator