Nordstrom Inc’s (JWN) store expansion strategy continues with its plans to open one new Nordstrom Rack store each in Columbia, South Carolina and Madison, Wis. by fall 2014. Additionally, with a view to enhance product deliveries to online shoppers in the East Coast, the company initiated the construction of its third fulfillment center at Conewago Industrial Park in Elizabethtown, Pa. on Jan 20.
Occupying a floor space of 34,000 square feet, the new Nordstrom Rack store in South Carolina will be located at Harbison Court in Columbia, which stands nearby the Columbiana Mall. Marking the company’s second Rack location in South Carolina, the new Columbia store will replace the Barnes & Noble Inc. store in the mall. It will join a host of retail chains including Ross Dress for Less by Ross Stores Inc. (ROST), Marshalls a subsidiary of The TJX Companies Inc. (TJX), Pier 1 Imports Inc., Golfsmith and Anna's Linens. Harbison Court is a property of DDR Corp. (DDR).
The second Nordstrom Rack store will be located at West Towne Crossing in Madison, Wis., situated close to the West Towne Mall. The 30,750 square feet Rack store coming up in the property of CBL & Associates Properties Inc. will mark the company’s second Rack location in Wisconsin, an hour’s drive from Milwaukee. The store will occupy the space previously held by Gander Mountain Outlet. The new Rack store will share business space with a vibrant mix of retailers including Ulta Salon, Cosmetics & Fragrance Inc. , Best Buy Co. Inc. , Metcalfe's and Kohl's Corp. among many others.
Nordstrom’s Rack stores generally offer merchandise from Nordstrom stores, Nordstrom.com and special collections from many of the renowned brands available at Nordstrom at a significantly reduced price to customers. A vast assortment of branded apparel, accessories and shoes that are available at Nordstrom stores are offered to customers at a discount of about 30%–70%.
Coming to the new fulfillment center, the new Pennsylvania building will occupy about 672,000 square feet space, having an additional 470,000 square feet mezzanine. This facility follows the company’s two existing centers in Cedar Rapids, Iowa and San Bernardino, Calif.
Moreover, this new facility will provide ample employment opportunities in the state, hiring about 400 people for full-time jobs along with several part-time and seasonal jobs for a span for 3 years. Later, the facility expects to employ up to 700 full-time personnels, with the scope to expand further as the business picks up. This center will primarily cater to the quick deliveries for orders via Nordstrom.com, Nordstrom mobile app and Nordstrom catalog.
Nordstrom.com presently serves shoppers in 98 countries, with everyday free shipping and returns offered to its U.S customers. The company has been successfully operating an integrated inventory platform between its stores and e-Commerce since 2009, while fulfilling online orders from any of its 117 full-line stores in the U.S.
The fulfillment center will be the property of Martin and William Murray and is being constructed by H&M Company Inc., while Jones Lang LaSalle is Nordstrom’s broker.
Nordstrom’s latest store openings signify the company’s commitment to strengthen its network with the aim of driving top-line growth. Nordstrom’s focus on store expansion is evident from the series of Rack store openings since the beginning of fiscal 2013. As of Jan 21, 2014, Nordstrom operated 261 stores, including 117 Nordstrom full-line stores, 140 Nordstrom Racks, 2 Jeffrey boutiques and 1 clearance outlet.
This Zacks Rank #3 (Hold) company targets to double the number of Rack stores to more than 230 by 2016. The company has successfully achieved its Rack stores target for 2013 by opening 24 stores, including 2 relocations. Moreover, the company targets to open about 30 Rack stores in 2014.