Business

Nordstrom Just Opened the First Piece of Its Manhattan Flagship Store

It’s been more than five years since upscale retailer Nordstrom (NYSE:JWN) first announced its plans to open a flagship store in Manhattan. While Nordstrom has several full-line stores in the New York metro area, this was to be its first one in New York City proper. Moreover, Nordstrom executives were determined to make it the company’s best store — and indeed, one of the best stores of any kind in the world.

On Thursday, Nordstrom opened the first phase of its Manhattan flagship: a 47,000-square-foot men’s store at the corner of Broadway and 57th Street, just south of Central Park. This store will serve as a valuable testing ground as Nordstrom prepares for the fall 2019 opening of its main flagship store across the street.

A rendering of the exterior of the future Nordstrom flagship store in Manhattan

Nordstrom will open its main Manhattan flagship store next year. Image source: Nordstrom.

A store just for men

Nordstrom didn’t always plan to operate separate men’s and women’s stores in Manhattan. But two years ago, when a sizable retail space became available down the block from its under-construction flagship store site, the company took the plunge and decided to open a stand-alone men’s store in that location. In opting for a separate men’s store, it followed the example of several other upscale New York department stores.

Nordstrom’s first-ever men’s store showcases merchandise covering a broad spectrum of price points. There are mini-shops devoted to several high-end designers, along with smaller displays for many other luxury brands. But there are also plenty of affordable items, including a big selection of Levi’s denim and Nike (NYSE:NKE) merchandise.

Indeed, Nordstrom has deepened its existing partnership with Nike for the Manhattan men’s store. The new store has a dedicated Nike shop featuring both sneakers and apparel, including some items that are exclusive to Nordstrom.

The Nike shop at the new Nordstrom Men's Store in Manhattan

The new Nordstrom men’s store in Manhattan includes a Nike shop. Image source: Nordstrom.

Services are the real differentiator

While Nordstrom has put together an impressive merchandise selection for the new men’s store, its vast array of service offerings and experiences really set it apart from competitors.

Some features are familiar, such as a bar and a coffee shop. The store also offers complimentary basic alterations for many purchases and free consultations with a personal stylist. Other offerings are more unique, such as on-site personalization (for example, custom embroidery), same-day delivery from the store, 24/7 pickup for online orders, kiosks near the entrances for quick returns, and something that Nordstrom calls “24/7 Express Services … for fashion emergencies like lost luggage or items that went unpacked.”

The emphasis on services reflects Nordstrom’s goal of creating something that can’t be replicated online. Management understands that Nordstrom needs to up its game to stay relevant, given that consumers can avoid department stores entirely if they want to.

Nordstrom will learn a lot about the New York market

New York is an unusual market for a department store. Consumers have lots of options, and they have particularly high standards for service. Additionally, tourists account for a significant proportion of sales at most of the top Manhattan department stores.

Obviously, Nordstrom wants its new men’s store to be as successful as possible. Yet it’s also treating this store as a laboratory that can help it refine its offerings for the main flagship store (which will house the women’s collections) before that location opens next fall.

With more than 300,000 square feet of space, the main Manhattan flagship store will be more than six times the size of the men’s store. It’s also a much larger investment: Nordstrom has already poured hundreds of millions of dollars into building the main store. That makes it critically important for Nordstrom to get things right the first time.

By contrast, Nordstrom has designed the men’s store to maximize its flexibility to make changes in the future, enabling it to take risks — such as simultaneously introducing a wide variety of unique services. This seems like a smart strategy. Nordstrom will learn a lot about its potential customer base in New York City over the next year, allowing it to refine its plans for the main store — thus maximizing the likelihood that the Manhattan flagship store really will be one of the best stores in the world.

Adam Levine-Weinberg owns shares of Nordstrom. The Motley Fool owns shares of and recommends Nike. The Motley Fool recommends Nordstrom. The Motley Fool has a disclosure policy.

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