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Nordstrom Inc. ( JWN - Analyst Report ) , a leading fashion specialty retailer in the United States, came up with a plan to inaugurate its second Nordstrom Rack store in San Antonio, Texas. The new Texas store will be located at the Alamo Quarry Market, with the showroom spread out in an area of about 32,000 square feet. The company expects the store to be open and operational by fall 2012.
Nordstrom’s first Nordstrom Rack store in San Antonio is situated at The Rim, while the company also has a full-line store at The Shops at La Cantera in San Antonio, Texas.
Located in central San Antonio, Alamo Quarry Market is a lifestyle and power shopping center owned and operated by American Assets Trust Inc. ( AAT - Snapshot Report ) . Other retailers doing business in the shopping center include Bed Bath & Beyond Inc. ( BBBY - Analyst Report ) , Office Max Inc. ( OMX - Analyst Report ) , Gap Inc. ( GPS - Analyst Report ) and Whole Foods Market Inc. ( WFM - Analyst Report ) along with a movie theatre. It also houses brands like Banana Republic, Old Navy, Pottery Barn, Restoration Hardware and several restaurants.
Nordstrom’s Nordstrom Rack stores generally offer on-trend merchandise from Nordstrom stores and Nordstrom.com at significant cost savings to customers. Products at these stores are sold with discounts of about 50% to 60% from the original Nordstrom tags. Nordstrom Rack also carries a vast assortment of branded apparel, accessories and shoes that are available at Nordstrom stores, and offered to customers with savings of about 30% to 70%.
Nordstrom’s latest store openings signify the company’s commitment to expand its store network with the aim to drive its top-line growth. The company’s focus on store expansion was also evident from the opening of four new Nordstrom Rack stores in the month of March 2012, including the stores opened at Orange, California; Salt Lake City, Utah; Huntington, New York; and Upland, California.
In fiscal 2011, Nordstrom added 18 new stores, contributing significantly to a 12.7% year-over-year growth in fiscal 2011 net sales. Moreover, Nordstrom plans to continue its store expansion strategy in fiscal 2012 targeting to open a total of 16 new stores, comprising 1 full-line store and 15 Rack stores.
Nordstrom offers a broad array of over 500 brands, targeted toward the whole family, through a strong nationwide network of 226 stores situated across 30 states. The company’s strong line up of globally known brands acts as a competitive advantage for Nordstrom while bolstering its well-established position in the market.
However, intense competition from other established players and exposure to seasonal fluctuations may undermine the company’s future growth prospects. Currently, Nordstrom maintains a Zacks #3 Rank, which translates into a short-term Hold rating. Our long-term recommendation on the stock remains Neutral.
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