Nordstrom Rack is looking to expand north, south, east and west.
The openings are part of parent Nordstrom Inc.’s goal of having over 230 Racks in operation by 2016, a number it could reach even earlier than that. There currently are 127 Racks, with plans to open 24 this year and another 30 in 2014.
Rack is also expanding in California, Texas and South Florida and in cities such as Chicago; tailoring assortments to local tastes; opening Rack units in areas where demographics couldn’t support a full-line store, and targeting university towns such as Eugene, Ore., near the University of Oregon.
With a single unit in Union Square that bowed in 2010, there’s room for Rack to grow in Manhattan, where Nordstrom is planning to open a 285,000-square-foot full-line store in 2018. “We’ve shown an ability to pursue both full-line and Rack growth” at the same time, said Colin Johnson, a Nordstrom spokesman. “We’re growing both sides of the business. We’re open to looking anywhere throughout the Northeast, in New York City, but also a number of other communities throughout the region.” Nordstrom will unveil a Rack in the spring of 2014 in Manhasset, N.Y., Johnson revealed. “We have a lot of opportunity to take care of a lot more customers,” he said of the New York-metro region.
The expansion of Rack is part of Nordstrom’s aggressive growth plan over the next five years. In that time period, the Seattle-based upscale chain will almost double its capital expenditures to $3.7 billion, compared to the $1.9 billion spent over the last five years. This year, $750 million to $790 million for capex has been allocated, mainly for Rack and full-line store growth, the Manhattan store development, and increasing e-commerce fulfillment capacity, versus the $455 million spent in 2012.
“The more [Racks we open] the more we’ve been impressed by their impact on our ability to serve more customers and also grow the business. We’ll look at further growth based on how customers continue to respond. Sure, it’s possible to revise [our goal of over 230 units] before 2016,” said Johnson.
The retailer is elevating the off-price shopping experience by bringing technology to Rack stores, where service has always been a cut above its competitors, as it is in Nordstrom’s full-line stores. For example, on-site tailoring has been a fixture at Rack since the beginning.
“One of the newer things we’ve done is introduced more technology to Rack,” Johnson said. The company late last year equipped Rack stores with modified iPod Touch mobile point-of-sale devices. “We started to learn and add functionality,” he said. “Service is defined by wait time. It’s helped us get rid of wait time in the line. Now shoppers don’t have to line up” because sales associates with POS devices go to them. “What we started to do is remove some of the registers we had in our stores. It freed up space so we can merchandise the store with more products.”
Besides wait time, breadth and quality of assortments define service. With Nordstrom full-line stores’ “regular price selling at historically high levels,” Johnson said the company has been able to acquire “the best product from vendors of the full-line stores. Forty-seven of the top 50 brands are sold at Rack,” he said.
Nordrom also tailors Rack assortments to local communities. For now, the company is tweaking assortments. In downtown Seattle, shoppers want an expanded women’s selection but no children’s, while a Rack in Bellevue, Wash., has a strong kids’ offering. Meanwhile, the Rack on Newbury Street in Boston that opened in March started off without a kids’ department. It began in May selling kids’ apparel and shoes.
Nordstrom wants to carry the Rack service experience to e-commerce. “We’re focused on defining what the off-price experience could be online,” Johnson said.
“It’s been helpful to work with Hautelook.com [which Nordstrom acquired in 2011]. We see a lot of potential to create a more robust experience. We’re very focused on that right now. We realize we have a way to go to make our online shopping capability a lot better.”
While Johnson declined to give numbers, he said Rack is more productive in terms of sales per square foot than rivals such as Saks Fifth Avenue’s Off 5th and Neiman Marcus’ Last Call formats. “It does over two times our competitors’ average in aggregate, based on our findings,” he said.
Rack units are moving in on full-line stores, which is all part of the strategy. Unlike competitors, Nordstrom has no aversion to opening Racks near a full-line store, or even in the same mall. In downtown San Francisco, a Rack will bow in spring 2014 on Fifth Street and Market Street in a space adjoining the Westfield San Francisco Shopping Centre, where a Nordstrom full-line store exists. “We don’t have a lot of Racks in outlet centers,” Johnson said. “We’re really thinking about retail environments. We look for terrific shopping centers with a lot of traffic. It helps us raise our game.”
Nordstrom has long known that Rack and full-line stores are compatible. During the recession, it took advantage of the drop in real estate prices. It’s all in service to shoppers. “It’s more convenient and gives the customer more choices,” Johnson said. The retailer’s comfort level with the proximity of different formats may be due to the fact that the off-price concept started in the basement of the downtown Seattle flagship in 1973. The format, which was used to clear merchandise, in 1987 moved to a freestanding location a few blocks away. It moved again last year, across the street from Westlake Center, where it’s connected by an indoor walkway to a full-line Nordstrom unit.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye