Nordstrom (JWN)is the largest upscale retailer in the United States, but it has never had a full-service department store in New York, the world’s largest and toughest fashion market. That is about to change.
The Seattle-based company is opening a men’s store near Manhattan’s Columbus Circle on Thursday in what will be a prelude to the opening of a mammoth 320,000 square-foot store Nordstrom is hoping will become a major tourist destination. The company wants a worthy contender in the luxury wars it wages with stalwarts like Barneys New York, HBC’s (HBC)Saks Fifth Avenue, and Bergdorf Goodman, all New York retailers with well established stores about half a mile from the Nordstrom hub.
The men’s store, a 47,000-square-foot emporium on three floors at the intersection of Broadway and 57th Street, will showcase features Nordstrom has been developing and banking on to keep its upscale department store approach in sync with changing consumer tastes and expectations. The company gave Fortune a sneak peek last week.
For instance, the store will be staffed (though not open) 24 hours in case a shopper wants to pick up an online order in the middle of the night, or if a visitor to New York on a business trip staying at a nearby hotel needs an emergency suit for an early morning meeting. The Nordstrom’s men’s store, its first separate store for gents, shows that chain won’t be shy about extending its fashion credentials. A case in point: it will have a one-year exclusive capsule from designer Comme des Garçons in a space at the front of the store that will feature pop-ups from different brands. In the shoe area, it will house the first Christian Louboutin shop for men in New York beyond the designer’s own locations. It will have 16 full time tailors and five personal shoppers. Men’s apparel generates 16% of Nordstrom sales (compared to 32% for women’s clothes), and footwear adds a few percentage points, so this is no afterthought for Nordstrom.
“It’s the most important fashion market in the U.S.” Nordstrom.com president Ken Worzel told Fortune in a recent interview. “We don’t think N.Y. needs another store, we get it. So it’s up to us to make our case to customers.” (Nordstrom’s Rack discount chain has two locations in Manhattan and others elsewhere in New York City.)
Nordstrom, which has reportedly poured $500 million into its New York flagship so far, is keenly aware that it needs to knock it out of the park as it goes up against incumbents like Saks, Barneys, and Bergdorf (owned by Neiman Marcus). Those rival Manhattan stores rake in hundreds of millions of dollars a year, easily. (Saks’ flagship on Fifth Avenue is believed to generate $600 million in annual sales.)
And with Neiman Marcus opening its own Manhattan flagship next year, Nordstrom is in a race to put its best foot forward and test new ideas ahead of the biggest store opening in the venerable chain’s 117-year history: the seven-level women’s store that will anchor a massive residential high-rise across the street from the men’s store and will be Nordstrom’s second largest store after its flagship in its hometown of Seattle.
Long search for a New York launchpad
The company had been looking for a spot in New York since the 1990s and typical of its deliberate approach to expansion, waited patiently for years for the right opportunity. (One project it considered was the Hudson Yards mega-project that will house a Neiman Marcus store.) In 2012, it finally announced its plans for the New York store. But in 2016, when a space across the street became available, a location that had once housed a discount store, Nordstrom pounced on the idea and decided to open a separate men’s store first, feeling it would also be a good test store for the upcoming main attraction. (The process was much quicker since Nordstrom did not build the space from scratch, unlike how it is proceeding for the women’s store.)
Nordstrom wants the New York men’s store to represent a big leap forward on a number of front. On the tech side that includes some newer features such as the ability to use the Nordstrom shopping app to reserve up to 10 items and have them waiting for a customer to try on in a dressing room assigned to him before he sets foot in the store.
On the merchandising side, for the first time, Nordstrom will offer shop-in-shop like spaces for designers such as Calvin Klein. And in a move to both attract tourists and ramp up its exclusive offerings, Nordstrom will be the first U.S. retailer to sell European brands such as Eton and Tiger of Sweden, both from the ancestral homeland of the Nordstrom family. In line with the growing expectation that a store has to offer more than products shoppers can find online, Nordstrom’s new store is offering amenities such as the ability to order a glass of wine from the shopping app while trying on items, a cafe with a partial view of Central Park, and even a barber shop. Other more practical touches include three self-service product returns kiosks as well as same-day delivery for a $20 fee.
While Nordstrom is regarded for customer service, it’s not often seen as that hip. But it is stepping up its cool cred and playfulness. The line of fitting rooms (see below) culminates with an image of a guitarist who bears a likeness to Guns ‘N’ Roses guitarist Slash, and “Hudson S,” a reference to the musician’s real name, on one of the nearby doors.
Nordstrom isn’t alone in realizing that luxury stores have to be more special than perhaps only a decade ago. When Saks opened a men’s store near the World Trade Center last year, it put in playful touches like a small mini-putt, along with services such as The Leather Spa for both shoe shines and repairs, as well as a barber shop. At the same time, the Nordstrom stores must succeed in a market that is already the chain’s largest online market, generating 10% of its online sales. Online sales often rise 20% in a market when a retailer opens a physical store. (Nordstrom gets 26% of sales online now, so it’s no small matter.) And on a stage like New York, Nordstrom’s last major virgin territory on the brick-and-mortar front, ‘really good’ won’t quite do it.
As co-president Erik Nordstrom put it at the WWD CEO Summit retail conference a few months ago, “We wanted to make sure that our store here in New York is something that will be revered and acknowledged worldwide, not just as a community store.”
