Nordstrom to open 1st full dept store in Manhattan

AP News
Posted: Jun 28, 2012 1:56 PM
Nordstrom to open 1st full dept store in Manhattan

NEW YORK (AP) — After circling Manhattan for at least a decade, Nordstrom Inc., the upscale department store chain, announced plans Thursday to open its first full-scale department store in New York.

The arrival of Nordstrom, envied by rivals for its top-notch customer service, will increase the competition in Manhattan, home to such department stores as Macy's, its upscale sister Bloomingdales, and Saks Fifth Avenue. But experts also believe its presence will inject new energy into what's already a retail mecca.

The Nordstrom store is set to open in 2018 at 225 W. 57th Street, between Broadway and Seventh Avenue south of Central Park, the company said. The store will be at the base of a skyscraper still in the planning stages that will also feature pricey residences.

"(Nordstrom) finally landed in New York," said Faith Hope Consolo, chairman of retail leasing and marketing at Prudential Douglas Elliman, who was briefed on the deal by a source at Nordstrom. "This is good news. It's going to reinforce shopping in that area."

Consolo worked with landlords on previous deals with Nordstrom that fell through, including locations at 57th Street and Park Avenue and on Sixth Avenue and 16th Street.

Nordstrom announced the details at a news conference in New York. Mayor Michael Bloomberg and Gary Barnett, president and founder of real estate company Estell Development Co., joined Peter Nordstrom, president of merchandising at the department store chain.

Nordstrom, based in Seattle, already operates two stores in Manhattan: a Nordstrom Rack outlet store on 14th Street and a store called Treasure & Bond downtown that donates its profits to local charities.

Real estate experts say that with the opening of its full-scale store, Nordstrom aims to piggyback on the success of the Time Warner Center in nearby Columbus Circle, anchored by high-end restaurants and specialty stores such as J.Crew, Tourneau, Williams-Sonoma and Coach.

While there were plenty of naysayers that predicted Time Warner's vertical mall would never work in a city of street shoppers, the center's performance has well surpassed expectations. The mall generates on average $1,600 per square foot, better than the expected $1,000 per square that was expected, according to Robert Futterman, chairman and CEO of Robert K. Futterman & Associates. Futterman was the leasing agent for the center when it first opened in early 2004.

With the exception of J.C. Penney, which opened a location near Macy's flagship store in Herald Square in 2009, it has been years since a major department store opened in Manhattan. A number of chains have closed, including Alexanders, Bonwit Teller, Gimbels and B. Altman.

"We've seen more exiting of department stores," than entering, said Jeffrey Paisner, a retail broker at Ripco Real Estate.

But industry experts say that stores like Saks and Bloomingdale's have something to fear from their new neighbor. Nordstrom has carved a niche with its expansive shoe department and is further enhancing its customer service to cater to a new era of shoppers armed with tablets and smartphones.

Nordstrom started offering free shipping on all online purchases with no minimum dollar amount last year. The company also is giving sales associates devices that let them check out shoppers anywhere in the store. It's providing free Wi-Fi access in all of its full-line department stores. And, early this year, it enhanced its loyalty program, Fashion Rewards, allowing customers to qualify for prizes with less spending.

"They're all going to have to up their game, particularly in customer service," said Brian Sozzi, chief equities analyst at NBG Productions, an independent research firm.