Nordstrom Inc. (JWN), a leading fashion specialty retailer, has recently announced plans to open a 45,000 square feet Nordstrom Rack in Tampa, making its debut in the city.
Nordstrom Rack is Nordstrom’s off-price division. The first Nordstrom Rack was opened in the basement of the Downtown Seattle store in 1975 as a clearance department. With a huge initial response, it has since grown into a separate division of the company. Currently there are 61 Nordstrom Rack locations in 21 states.
The new store would be the first of its kind in Tampa and fifth in the state of Florida. Currently, Nordstrom has about 175 stores spread across 28 states in the US, offering a selection of branded and private label merchandise. The company sells its products through various channels, including Nordstrom full-line stores, Nordstrom Rack off-price stores, Last Chance clearance stores, Jeffrey boutiques, through catalogs and the Internet.
The new Nordstrom Rack is expected to open in the fall of 2010 and is set at a prime location. The store would offer merchandise at fire sale prices with discounts of 50% – 60% to regular prices.
Despite a reduction in disposable income and lower consumer discretionary spending due to the continued economic downturn, Nordstrom has continually opened new stores to attract more customer traffic. We maintain our Neutral recommendation of the stock.
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