Nordstrom’s New Full-Line Store in CA – Analyst Blog

Nordstrom Inc. (JWN), a leading fashion specialty retailer, recently opened a new full-line store spanning 138,000 square feet at Fashion Island, an upscale open-air shopping mall in Newport Beach, California. With the new addition, Nordstrom currently has six full-line stores in Orange County.

 

Besides showcasing a selection of high-quality clothing, accessories, shoes and cosmetics from emerging designers, the new Nordstrom store would also offer various amenities to enhance the shopping experience. These include in-store alterations and tailor shop, shoe shine, complimentary gift boxes and Personal Stylist – a complimentary wardrobe and shopping service. The store would also feature a Cafe Bistro and an espresso bar to refresh the customers.

 

Nordstrom is focused on organic store expansion to drive top-line growth and compete effectively against other well-established rivals. During fiscal 2009, the company opened 3 full-line stores and 13 Nordstrom Rack stores, increasing its retail square footage by 0.9 million or 4.1%. The company plans to open 3 full-line stores during fiscal 2010.

 

Furthermore, Nordstrom’s operations are based on a variable cost business model and about 40% to 45% of selling, general and administrative expenses are variable in nature. This flexible cost structure not only helps the company to mitigate the impact of sluggish sales trends on margins, but also enables it to grow organically.

 

Nordstrom currently has about 191 stores spread across 28 states in the US. The company offers a selection of branded and private label merchandise through various channels, including 114 full-line stores, 74 Nordstrom Rack off-price stores, Last Chance clearance stores, Jeffrey boutiques, catalog, and the Internet.