Nordstrom Inc.JWN took another step toward expansion with plans to introduce a Rack store in Tennessee.
Spanning 33,000 square feet, the new Rack store will be positioned at Poplar Commons in Memphis, marking the city's first Rack store. Further, the store is slated to open doors in the fall of 2017, marking Nordstrom's second Rack and third store in the country.
The new Rack store will be situated in a leased property by Seritage Growth Properties, which is in the process of constructing a 135,000-square-foot shopping mall, replacing a Sears building. Located in east Memphis, at the crossroads of Poplar Avenue and Perkins, the new center, Poplar Commons will also house many specialty retailers like Macy's, Inc. M , Dillard's Inc. DDS and Target Corp. TGT among others, along with various renowned restaurants.
Nordstrom Rack, being the off-price retail segment of the company, 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 and earnings also plunged year over year. Results were impacted by a tough holiday season, heavy discounts and 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 deliver sustainable profitable growth over the long term. Also, the company's strong brand image and continuous 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. Its latest store openings signify the company's commitment toward strengthening its network with an aim to drive top-line growth.
The company currently operates 323 outlets across 39 U.S. States and Canada, including 121 full-line stores, 2 Jeffrey boutiques, 194 Nordstrom Racks and 1 clearance store.
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