Leading fashion retailer, Nordstrom Inc. (JWN), came up with plans to open two more Nordstrom Rack stores at different locations in the U.S. These new Rack stores will be located at the Columbia Crossing shopping center in Columbia, Maryland; and in downtown Washington, District of Columbia.
The Columbia Crossing shopping center, spread over about 475,000 square feet, is the property of Kimco Realty Corp. (KIM). Located in Columbia Crossing shopping center, the company’s fourth Rack store in Maryland will encompass an area of 40,750 square feet, just three miles east of its full-line store at The Mall in Columbia. The store will share space with other leading retailers including Target Corp. (TGT), TJMaxx, Dick's Sporting Goods Inc. (DKS) and Old Navy. The company plans to open the store to public by spring 2013.
Joining the company’s several full-line and Rack stores in greater District of Columbia region, the new Rack store will be located at the 1800 L Street building, which is owned and managed by Somerset Partners LLC. The one-level store enclosing about 35,000 square feet will occupy the space previously held by Borders book store. Other stores in the building include Brooks Brothers, Burberry, and Thomas Pink. This store is also scheduled to be inaugurated in the spring of 2013.
Nordstrom’s Rack stores generally offer merchandise from Nordstrom stores and Nordstrom.com at a significantly reduced price to customers. Products at these stores are sold with discounts of roughly 50% to 60% from the original Nordstrom tags. Nordstrom Rack also carries a vast assortment of branded apparel, accessories and shoes that are available at Nordstrom stores, and are offered to customers at a discount of about 30% to 70%.
Nordstrom’s latest store openings signify the company’s commitment to expand its store network with the aim of driving top-line growth. As of December 17, 2012, Nordstrom operated 117 Nordstrom full-line stores, 119 Nordstrom Racks, 2 Jeffrey boutiques, 1 treasure&bond store and 1 clearance store, thus bringing the total store count to 240.
Moreover, the company has targeted to open 16 new stores in fiscal 2012 consisting of 1 full-line store and 15 Nordstrom Rack Stores. Additionally, the company has planned to add 24 new Rack stores in fiscal 2013 and intends to operate 230 Rack stores by the end of 2016.
Nordstrom currently maintains a Zacks #3 Rank, which translates into a short-term Hold rating. Moreover, our long-term recommendation on the stock remains Neutral.
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