Nordstrom Inc. JWN seems to be progressing well with its expansion plans as it intends to introduce two more Rack stores in Washington D.C. and TX.
Spanning 37,000 square feet, the new two-level Rack store in the state capital will be located at the District Center in the heart of Washington D.C. The District Center is conveniently situated in downtown Washington D.C. at a walking distance from several metro stations, as well as near popular tourist spots including the White House, National Mall, International Spy Museum, Madame Tussaud's and Ford's Theatre.
The new store will find its place amid a great mix of retailers housed in the District Center, including Macy's Inc. M, H&M, Zara and T.J.Maxx. The store will mark the company’s 13th Rack store in the Washington D.C./Baltimore area. The company opened its first Rack store in the region in 1990 at Potomac Mills in Woodbridge, VA .Currently, Nordstrom has seven full-line stores in the Washington D.C./Baltimore area, with the closest store located at The Fashion Centre in Pentagon City. The Washington D.C. store is slated to open doors in the fall of 2016.
Further, the company’s new Texas Rack store will be positioned at The Parke in Cedar Park, just north of Austin. Opening doors in spring 2017, the new Rack store will join a mix of retailers, including Whole Foods, DSW Inc. DSW, Dick's Sporting Goods and Field & Stream stores – by Dick's Sporting Goods Inc. DKS.
Spanning 31,000 square feet, this store will mark the company’s third Rack store in the Austin area. Previously, the company operated two Rack outlets, located at Sunset Valley Shopping Center in Sunset Valley and the Gateway Center in Austin. Nordstrom stepped into the Greater Austin region with its first full-line store at Barton Creek Square in 2003. The company is slated to expand its full-line presence in the region with its second full-line store that will open on Sep 30, at The Domain. Also, the company had launched its first Nordstrom Rack store in the area, in 2009.
Being the off-price retail segment of the company, Nordstrom Rack offers fashion-savvy customers a wide range of on-trend apparel, footwear and other accessories at discounted prices. These Racks usually keep items from the main Nordstrom stores and its online store, Nordstrom.com. Alongside, these stores stack products from other major brands sold by the company.
However, the Zacks Rank #5 (Strong Sell) company recently posted dismal fourth-quarter fiscal 2015 results, wherein both the top and bottom lines lagged expectations. Also earnings plunged year over year. Results were impacted by a tough holiday season, heavy discounts and an unseasonably warm weather.
Further, the company issued a bleak earnings outlook for fiscal 2016, as it expects the first half to be impacted by the sale of credit receivables in Oct 2015, the unfavorable shift of the Anniversary sale event and costs related to various growth initiatives.
Nonetheless, Nordstrom’s strategic investments should help it to sustain profitable growth over the long term. Also, the company’s strong brand image and continued store expansion endeavors remain driving factors.
Nordstrom’s focus on store expansion is evident from the series of Rack store openings over the last couple of years. The latest store openings signify the company’s commitment to strengthen its network with an aim to drive top-line growth. In fiscal 2016, the company plans to open 3 full-line stores and 20 Nordstrom Rack stores.
Nordstrom currently operates 326 outlets across 39 U.S. states and Canada. Its portfolio includes 121 full-line stores, 2 Jeffrey boutiques, 197 Nordstrom Racks and 1 clearance store.
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