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Nordstrom: Focusing On Off-Price?

(Filed Under Fashion News). Lately just about every week Nordstrom, Inc. announces the planned opening of a Nordstrom Rack store; the company’s off-price division (most recently in Atlanta, Ga. scheduled for spring 2010).

With the economy ailing and better department store retailers like Nordstrom suffering, it seems that the company is focusing attention on its affordable chain, which currently includes 61 stores in 21 states with the majority of merchandise running 30 to 70 percent lower than in Full-Line stores. Both Full-Line Nordstrom and Nordstrom Rack carry a wide variety of intimates by well-known brands including Simone Perele, Hanro, Betsey Johnson, Chantelle, Wacoal, Fantasy, Freya, Panache, Natori, Huit, and Anita International, among others.

But according to Brooke White with Nordstrom, the company’s primary focus is to expand its Full-Line business, while Nordstrom Rack remains a side initiative. Although off-price may seem like the company’s focus, it is simply “playing catch-up” after several years of aggressive Full-Line growth (in 2008 the company opened eight Full-Line and six Rack stores). She pointed out that the company’s store plans were already in place when the economy went south. According to Nordstrom’s 2008 annual report, its five-year strategic plan includes opening 28 total stores by 2013.

White reported that the company plans to open a total of 13 Racks and three full-line stores by the end of 2009. She added that, since approximately 30 percent of Nordstrom customers shop at both full-line and off-price divisions, the most successful Racks are near preexisting Full-line stores, and both benefit from the proximity.

But whatever the company’s plans may be, since 2008 Nordstrom Rack has consistently—and unsurprisingly—been its highest-performing division. Although total net sales were down 9.2 percent and full-line stores decreased 16.5 percent during the first quarter ended May 2, 2009, Nordstrom Rack increased 1.2 percent, “[Outperforming] most of its off-price competitors,” the company said.

Similarly, in 2008, although total net sales decreased 6.3 percent and full-line same store sales declined by 12.4 percent, Nordstrom Rack was up 3.1 percent, marking the Rack’s seventh consecutive year of positive growth.

The first Nordstrom Rack was opened in 1975 on the lower level of the Nordstrom store as a clearance center for full-line merchandise. According to the company, as Nordstrom expanded into other parts of the country, Nordstrom Rack followed.

Founded in 1901 in Seattle, Wash., as of the end of the recent first quarter Nordstrom, Inc. operated 176 stores in 28 states. To reach the company, call Brooke White at (206) 373-3030, or e-mail her at

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Published 06-18-2009 by Amanda Torres Price

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