Nordstrom to close 16 stores post COVID

[timanny]

Arden Fair and Escondido don't surprise me. Pleasanton does. I worked in the Macy's Mens Store there for years and they were a formidable competitor. I'm guessing it's because Walnut Creek is only about 20 minutes away and fits Nordstrom's demographics better - Pleasanton is sandwiched between Dublin and Livermore, neither of which are as upper-middle class as Pleasanton.

[Alpha8472]

Nordstrom has been trying to downsize at the Pleasanton location since 2005. The rent at that mall was probably too high. Sears closed their 1996 built location a couple of years ago.

This is all about cutting costs wherever possible. It is clear that Nordstrom wants to become more like Ross and Marshall's. The profit is made selling the discount clothing.

If the mall in Pleasanton had actually demolished the Nordstrom as planned in 2005, the replacement would probably have been a smaller Nordstrom Rack. The mall wanted to build a new movie theater and restaurants in place of Nordstrom.

[babs]

I could see Clackamas Town Center being one, leaving the Portland, Ore. market with two "traditional" stores -
Washington Square (decent cap ex appears to be spent here)
downtown Portland (significantly valuable real estate, I believe they own it, cap ex spent here too in recent years)

Tacking on here, the national media seem to want to talk about Lord + Taylor filing for bankruptcy in the coming weeks. Luxury retailers are certainly not immune to changes that were already happening and then this pandemic has accelerated.

Nordstrom does not own the downtown Portland store. They sold it many years ago.

[babs]

What happens to them when they have only a few full line stores and run hundreds of "Rack" Stores? A lot of the reason the "Rack" Stores are so popular is due to the reputation the full line stores have.

It appears they are trying to evolve into being an off price chain.

I wonder what % of revenue and profits comes from Rack and what from Full Line.

About 1/3 of their business comes from the Rack but it has been growing while sales at full line store has been declining. But about 1/3 of their full-line business is online. The Rack online business is recent is so far is a small part of their business.

The reality is that Nordstrom isn't doing anything wrong. In fact, they have done everything right. The were early in launching an online business, they sell nearly as much online as the much larger Macys does. They launched a discount business many years ago, a business Macy's wishes they had. The problem for them is that the world around them is changing and they are struggling to figure out where they fit. For instance, I love Cole Haan shoes. All my nice shoes are Cole Haans and I used to by them at Nordstrom. Now I order them direct from Cole Haan, although I bought my last pair online from Costco.

There's no great answer here. The business is well balanced between full price, off price and online. But with the country in a recession, they probably made the right call to pull the plug on stores that likely were declining in sales.

[SamSpade]

List of closing stores here:
https://wwd.com/business-news/retail/no ... 203630113/

Unfortunately other than the teaser of some California stores, that list is behind a paywall for WWD (smart).

[lake]

List of closing stores here:
https://wwd.com/business-news/retail/no ... 203630113/

Unfortunately other than the teaser of some California stores, that list is behind a paywall for WWD (smart).

Stores are
-Naples, FL
-Miami, FL (Don't know if Dadeland or Merrick Park, can pretty much assume it won't be Aventura)
-San Juan, Puerto Rico
-Annapolis Maryland
-Freehold, NJ
-Richmond, VA
-Hurst, Texas
-Flatiron, Colorado
-Mesa, AZ
-Arden (Sacramento), CA
-Westfield North County (Escondido, CA)
-Pleasanton, CA
-Riverside, CA
-Montclair, CA
-Santa Monica, CA
-Clackamas (Portland), OR

[SamSpade]

Out of the closing stores, the only two that I'm familiar with are Hurst, TX and Broomfield, CO.

Although the neighborhoods immediately surrounding the mall are solidly middle-class, the mall is located at a major highway intersection for commuters traveling between wealthy areas such as Southlake, and Fort Worth. However, for several years in the late 2000's through the mid 2010's, this prime location became a liability as highway reconstruction made the mall a massive pain to get to. In addition, a big box center which was later constructed on the south end of the mall property has increased traffic in the area, further inconveniencing visitors to the mall itself.

Off Topic

Sounds kind of weird that JCPenney chose this site for their new concept location. But then again, solidly middle-class is their market. (& who knows, maybe the new beautiful store actually worked, even against Nordstrom)

[SamSpade]

Stores are
-San Juan, Puerto Rico

Thanks for posting the list. Who knew that Nordstrom had any operations in PR? (I sure didn't)

[buckguy]

They're probably trying to streamline operations in places like West LA where they have multiple stores and may have decided to keep the most profitable or ones with the best long-term performance.

Among the DC/Baltimore locations, Annapolis was probably rather marginal--Annapolis has some wealthy suburbs and there are some well-off southern suburbs of Baltimore nearby, but most of that area is middle income. That mall had an early Lord & Taylor closing a while ago.

The Rack stores seem to vary a lot in terms of stocking. The downtown DC store has a large men's selection. The one near Pentagon City has a particularly large shoe selection. One value of Rack is that they can be flexible in terms of how much is clearance merchandise and how much is Rack-only.

Nordstrom seems to have "A" and "B" stores--the Bs have less truly high end merchandise. I wonder if the closings include disproportionately more Bs. I'd imagine that locations like Montclair fit that category. The As are probably more profitable, overall, but need sufficient volume to make that happen and As that close may lack that.

[veteran+]

List of closing stores here:
https://wwd.com/business-news/retail/no ... 203630113/

Unfortunately other than the teaser of some California stores, that list is behind a paywall for WWD (smart).

Stores are
-Naples, FL
-Miami, FL (Don't know if Dadeland or Merrick Park, can pretty much assume it won't be Aventura)
-San Juan, Puerto Rico
-Annapolis Maryland
-Freehold, NJ
-Richmond, VA
-Hurst, Texas
-Flatiron, Colorado
-Mesa, AZ
-Arden (Sacramento), CA
-Westfield North County (Escondido, CA)
-Pleasanton, CA
-Riverside, CA
-Montclair, CA
-Santa Monica, CA
-Clackamas (Portland), OR

I will be shocked if the Dadeland store is closed. This is one of the most visible and high traffic malls anywhere around. Many stores there are considered flagship and boast highest volume (including nearby Publix).