By  on July 22, 2009

NEW YORK — Nordstrom Inc. said Tuesday it will open its first Nordstrom Rack in Manhattan, a 32,136-square-foot unit at 1 Union Square South.

The announcement confirms a WWD report on May 20. The store, on 14th Street between Broadway and Fourth Avenue, is slated to open in spring 2010. The site previously was occupied by a Virgin Megastore.

The Seattle-based retailer had been looking for a space in Manhattan for a full-line store for several years and almost had a deal at the Drake Hotel on Park Avenue and 56th Street, but Harry Macklowe, who was to develop the property, ran into financial problems. Brooke White, a Nordstrom spokeswoman, said the company will “continue our search” for a full-line store. “We’ll continue to keep our eyes open. We have not been successful yet; real estate for the size of a Nordstrom store is at such a premium. We’re hopeful that some day it will still happen.”

The new Rack unit will have 30 feet of street frontage and a lobby on the ground floor with escalators leading to the lower level, where the store will be housed. The Related Companies, which developed the property, said Best Buy has signed a lease to occupy the adjacent space. Weber Hudson, executive vice president of Related Urban Development, said 200,000 people live and work in the immediate area and 35 million a year pass through the eight subway lines that connect at Union Square. New York University is close to Union Square. “That part of town has become a more affluent residential market,” Hudson said.

Rack is seen as a growth vehicle for Nordstrom, and the retailer continues to sign leases. One of the most recent openings was in March at the Bergen Towne Center, previously known as Bergen Mall, in Paramus, N.J.

White said the Union Square Rack will feature men’s and women’s apparel, shoes and accessories. It won’t offer children’s wear or shoes because “the demographics of the market wouldn’t support that. We wanted to make sure we had [room for] a terrific offering.”

Nordstrom hopes New York consumers will make the distinction between a full line Nordstrom store and a Rack. “It’s a different experience, a different offering,” White said. “Rack is clearance merchandise from Nordstrom stores and merchandise we’ve specially purchased from the same brands we carry in our full line stores.”

Premium denim brands such as Seven Jeans are currently popular at Rack stores, White said. “What’s been driving business in full line stores has been driving business in Racks. Customers are still looking for the same brands that excite them in full line stores,” she said.

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