Nordstrom Inc. (JWN - Analyst Report), a leading Seattle-based fashion retailer, announced its intentions to open a third Nordstrom Rack store in Long Island, New York, by fall 2013. The company’s new store will be nested in the Manhasset Center, which is a property of Kimco Realty Corp. (KIM - Analyst Report).
Located off the Northern Boulevard, the Manhasset Center is a large shopping center spread over an area of 189,000-square feet. Enclosing a store area of about 32,000 square feet, the new two-level store is positioned in the ground and second level of the Manhasset Center. The store will replace the space previously occupied by Filene's Basement. Further, the company’s new Rack store will shake legs with regional grocer, King Kullen, and retailers Marshalls, a subsidiary of The TJX Companies (TJX - Analyst Report), and Michaels, at the Manhasset Center.
Simultaneously, Nordstrom opened two previously announced Rack stores in New York. These stores comprise the company’s second Rack store in Long Island at Huntington Shopping Center and a repositioned store in White Plains at City Center. Last month, the company had opened another relocated Nordstrom Rack store at Gallery at Westbury Plaza.
Nordstrom Rack store is an off-price retail format of Nordstrom. These stores generally offer merchandises that are in trend from Nordstrom stores and Nordstrom.com at significantly reduced prices 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 stores to drive its top-line growth. As of October 17, 2012, Nordstrom operated 117 Nordstrom full-line stores, 116 Nordstrom Rack, 2 Jeffrey boutiques, 1 treasure&bond store and 1 clearance store, thus bringing the total store count to 237.
Moreover, the company remains on track to achieve its target of opening 16 new stores in fiscal 2012 consisting of 1 full-line store and 15 Nordstrom Rack Stores. Year-to-date, the company has already opened 1 full-line store and 11 rack stores and will open one more Rack store this month at Huntington Shopping Center in Huntington, New York.
Further, Nordstrom plans to add 24 new Rack stores in fiscal 2013 and intends to operate 230 of such stores by the end of 2016.
Currently, Nordstrom has a Zacks #2 Rank, which translates to a short-term Buy rating. However, we remain slightly cautious on the stock and uphold our long-term ‘Neutral’ recommendation, waiting to see further catalysts before obtaining a more positive stance on the stock.