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Nordstrom’s N.Y. Home Set to Open by 2018

The retailer has high expectations for its Manhattan flagship and a lengthy road ahead before the store is up and running.

Daniel Garodnick, Mayor Bloomberg, Pete Nordstrom, Gary Barnett and Erik Nordstrom.

NEW YORK — Nordstrom has high expectations for its Manhattan flagship and a lengthy road ahead before the store is up and running.

This story first appeared in the June 29, 2012 issue of WWD.  Subscribe Today.

“It’s quite something. This has been a long time coming,” said Pete Nordstrom, president of merchandising, Nordstrom Inc., at a press conference Thursday revealing that Nordstrom’s first full-line store in New York City will open in 2018 or possibly 2017, and will be located at 225 West 57th Street, between Broadway and Seventh Avenue near Columbus Circle.

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“We fully expect this store to be our most productive store,” Nordstrom added. “For this to work, we have to do a lot of volume.”

He also said that the store will have 285,000 square feet over seven levels, making it the most vertical of any unit in the $11.2 billion retailer. The highest Nordstrom goes currently is five floors and generally the retailer operates with two or three levels.

There will be challenges to drive shoppers all the way to the upper floors, as most multilevel shopping environments experience, Nordstrom acknowledged. However, he also said the new configuration for Manhattan will motivate his team to get creative in designing the floor plans. “We can do multiple different environments, rather than just having an open pad,” he said.

There will be major expectations for the shoe floor, because it’s the category Nordstrom is best known for and goes deepest in, and because New York City seems to be in a prolonged retail shoe war. Macy’s is building what it says will be the world’s largest shoe floor; Saks Fifth Avenue is currently expanding its 10022-Shoe floor; Bergdorf Goodman recently expanded and reorganized its shoe salon, and Barneys is also revamping its shoe floor.

Nordstrom won’t be able to build a shoe department as large as Macy’s. Yet that didn’t seem to perturb Erik Nordstrom, president of stores for Nordstrom Inc., which operates 117 full-line stores, 110 Nordstrom Rack outlets, two Jeffrey boutiques and one Treasure & Bond store in SoHo, where the conference was held.

“I don’t think it’s necessarily about who has the most square footage,” he said. “What you need to have is a great selection and great service.”

Nordstrom will be among the biggest stores in Manhattan, surpassed by Macy’s with over 1 million square feet, Bloomingdale’s with 859,000 square feet, Lord & Taylor at 650,000 square feet and Saks Fifth Avenue at 646,000 square feet. Pete Nordstrom said that, for Manhattan, he wouldn’t have picked anything less than about 225,000 square feet, which is far more space than typical Nordstrom stores, which average well under 200,000 square feet.

The Nordstrom flagship will anchor a mixed-use building being developed by Extell Development Co. The building will have a commercial complex, a hotel and a tall residential building. Nordstrom is partnering in the project and will own its own space, as if it was purchasing a condominium. Nordstrom, along with Extell, started interviewing architectural design firms on Thursday, two days after Nordstrom’s board approved the location. Typically, the board does not vote on new sites but did in this case due to the amount of capital involved. Nordstrom declined to disclose how much the company is spending on the site.

In addition to the 225 West 57th Street project, Extell is near completion on the city’s tallest residential building nearby at 157 West 57th, which will have 90 stories.

For more than two decades, Nordstrom has been eyeing Manhattan for a site. “We had a chance to vet a lot of different choices,” Pete Nordstrom said. With 57th Street, “We think we made a really good decision. It’s a great residential area. There’s big tourism and a lot of people do a lot of shopping here.” He told WWD later, “If 225 became known as the Nordstrom building, that would be great.”

Among other sites the retailer considered were Related Cos.’ Hudson Yards project on the far West Side; the former Drake Hotel site on East 57th Street; the Herald Square area; 3 Columbus Circle, and the former Alexander’s store next to Bloomingdale’s, which became the Bloomberg Building.

Nordstrom said the decision came down to being attracted to all the residential activity in the 57th Street area, and that rather than move into untested territory, such as Hudson Yards, 57th Street represented “a bit less pioneering.” For the 57th Street deal, Jones Lang LaSalle represented Nordstrom. Robert K. Futterman, chairman and ceo of Robert K. Futterman & Associates, represented Extell.

Even while locking into 57th Street, Nordstrom’s Manhattan quest may not be over. The company could be back searching for more real estate, even for another full-line store, as Erik Nordstrom suggested. “Downtown would be something to look at, but there’s nothing in the works.…We’re certainly interested in having more Racks,” though there’s no number set on how many. Nordstrom has just one Rack location in the city, on 14th Street in Union Square. The company also likes to have Racks situated near full-line stores. Rather than cannibalize each other, synergies are created, Pete Nordstrom noted.

On another front, Nordstrom is looking to enter Canada, where it’s been examining sites. “We are looking there. There is nothing to announce,” Pete Nordstrom said. One possibility is a former Sears in Vancouver.

In Manhattan, Nordstrom could be challenged to get all the brands it wants, considering many have distribution agreements with existing retailers, plus they have their own stores. “It’s an issue wherever we go, for certain brands,” Erik Nordstrom said. “We need to have the best brands,” though no discussions with brands regarding 57th Street have been held yet. “New York is such a healthy city. It doesn’t suggest overdistribution, and there’s not a store like ours on the West Side. We will create terrific space for brands” to win them over.

“I don’t think it will be a challenge for 90 percent of the brands,” added Pete Nordstrom. “It may be only with the 10 percent super-high-end luxury brands.”

Also present at the press conference was Mayor Michael Bloomberg, who said Nordstrom means roughly 1,000 new jobs for the city, as well as Councilman Daniel Garodnick, and Extell president Gary Barnett. “This is great news,” said Bloomberg. “Nordstrom is one of the premier names in retailing.”

The mayor also said that retail growth in the city has doubled in the past 10 years despite the ups and downs of the economy. Retailing, he explained, has been abetted by tourism, citing 50.5 million visitors to the city last year. “This year looks even better,” the mayor added, though certain retailers such as Saks and Bergdorf’s have cited declines in tourism at their stores this year.