Store openings at Nordstrom Inc. (JWN - Analyst Report), a leading Seattle-based fashion specialty retailer, seem to be picking up swifter than before as the company works toward achieving its goal of opening 16 new stores this fiscal year. Yesterday, Nordstrom announced its plans of opening three new Nordstrom Rack stores in Ohio, Michigan and Wisconsin.
Nordstrom’s new Rack store in Ohio will be positioned at the Easton Market in Columbus, with a store space of about 35,000 square feet. The Easton market situated adjacent to Easton Town Center, a leading mall in the region, already houses leading retailers like Bed Bath & Beyond Inc. (BBBY - Analyst Report), DSW Inc. (DSW - Snapshot Report), Old Navy, TJMaxx and Ulta Salon, Cosmetics & Fragrance Inc. (ULTA - Snapshot Report). The company already operates a full-line store in the Easton Town Center. The company’s Columbus store is scheduled to open to public in fall 2013.
Nordstrom’s second announcement reveals its plan of opening another Nordstrom Rack store at Arborland Center in Ann Arbor, Michigan. The Arborland Center is situated in southeastern Ann Arbor between the University of Michigan and Eastern Michigan University. Spread over an area of 30,000 square feet, Nordstrom’s new Michigan showroom is expected to begin operations in spring 2013. The store will mark the company’s third Rack store in Michigan, while the company also operates three full-line stores in the area.
Moving further west, Nordstrom’s next Rack store is planned to come up at The Mayfair Collection in Wauwatosa, just outside of Milwaukee in Wisconsin. The Mayfair Collection, a 250,000 square feet planned adaptive reuse development of a former industrial complex and distribution center will be located half a mile from Mayfair Mall. The shopping Center will also accommodate retailers like Dick's Sporting Goods Inc. (DKS - Analyst Report) and Ulta. The company expects to start operating its first Wisconsin showroom by spring 2014.
Nordstrom’s Rack stores generally offer merchandise that are in trend from Nordstrom stores and Nordstrom.com at a significantly reduced price to customers. Products at these stores are sold with discounts of roughly 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 are offered to customers at a discount of about 30% to 70%.
Nordstrom’s latest store openings signify the company’s commitment to expand its store network with the aim of driving top-line growth. As of August 2, 2012, Nordstrom operated 117 Nordstrom full-line stores, 110 Nordstrom Rack, 2 Jeffrey boutiques, 1 treasure&bond store and 1 clearance store, thus bringing the total store count to 231.
Moreover, the company has targeted to open 16 new stores in fiscal 2012 consisting of 1 full-line store and 15 Nordstrom Rack Stores. The company has also planned to add 24 new Rack stores in fiscal 2013 and intends to operate 230 Rack stores by the end of 2016.
Nordstrom currently maintains a Zacks #2 Rank, which translates into a short-term Buy rating. However, our long-term recommendation on the stock remains Neutral.