Nordstrom Inc. (JWN), one of the largest fashion specialty retailers in the U.S., intends to further expand its Rack concept by opening a new store in Farmington, Connecticut. The store at the shopping center will include a wide selection of apparels, accessories and shoes of the Nordstrom Rack store.
Nordstrom Rack store is an off-price retail format of Nordstrom that sells the company's off-season and clearance goods from its mall stores and Nordstrom.com at a discount of 50-60% from original Nordstrom prices.
Rack also showcases apparel, accessories and shoes, which are specially purchased for Nordstrom Rack with 30-70% off original prices. The Rack concept is specifically designed for customers who are appreciative of the brand but cannot afford it given its higher pricing.
About West Farm Shopping Center
The new store, spanning 35,000 square-feet, is expected to come up in spring 2012 and will share the floor with retailers such as TJ Maxx, Sports Authority and Petco. The new store will now be a part of West Farm Shopping Center, which is owned and managed by Kimco Realty Corporation (KIM).
Kimco has an ownership interest in over 948 regional and super regional shopping malls in 44 states of the United States, Puerto Rico, Canada, Mexico and South America.
Our Take
We believe that the Rack stores provide a viable option for consumers with less disposable income to buy branded products at affordable prices.
Store Update
At present, the Seattle-based company, Nordstrom, operates a network of 214 stores located in 29 states of which 116 are full-line stores, 95 Nordstrom Racks, two Jeffrey boutiques and one clearance store.
Nordstrom, which competes with Gap Inc. (GPS) and Abercrombie & Fitch Co. (ANF), currently, holds a Zacks #2 Rank, implying a short-term Buy rating on the stock. Besides, the company retains a long-term Neutral recommendation on the stock.
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