Fashion, Designers Take Lead at Nordstrom's 'Best' Store

The Nordstrom store that debuted on Oct. 6 at Westfield Topanga shopping center in Canoga Park, Calif., will offer the most designer fashions of all the Seattle-based department store’s doors.

The reason is simple. The Westfield Topanga store is one of its biggest, according to Peter Nordstrom, president of merchandising.

The average Nordstrom has a square footage of more than 145,000 square feet. The Topanga store, which is more than 27 miles north of downtown Los Angeles, has more than three floors and 200,000 square feet, housing all its departments, including fashion, shoes, beauty products, housewares and cafes.

“We had the opportunity to do the full deal,” Peter Nordstrom said. “We had an opportunity to do a flagship in the greater Los Angeles area.”

The store’s first floor features handbags and accessory boutiques for iconic names such as Dior, Gucci and Chanel. The second floor features Nordstrom’s first Gucci ready-towear boutique, and separate boutiques for Chanel, Valentino and Dolce & Gabbana.

Premium denim is a high-marquee attraction at Nordstrom. The Topanga location features a denim bar at the redesigned premium-denim store t.b.d.

Nordstrom executives touted t.b.d. as the womenswear version of The Rail, which is Nordstrom’s men’s premiumjeans store. T.b.d. offers popular premium brands such as AG Jeans, Chip & Pepper, Citizens of Humanity, J&Company, Hudson and Paige Premium Denim.

Fashion will continue to play a dominant role at the retailer, according to Erik Nordstrom, president of stores. “We’ve always been a fashion specialty store,” Nordstrom said. “But the importance of fashion has increased.”

For example, the luxury-based retailer expanded its fashion-forward via c department throughout half of its stores. The department offers buzzworthy fashion labels including Doo.ri, Dsquared2, Jovovich-Hawk, McQ, Phillip Lim and Prada Denim.

Topanga’s new Nordstrom store is a product of a relocation effort. For 22 years Nordstrom did business at the west end of the shopping center property. The new store is at the southeast end of the property. A Neiman Marcus store will open in Nordstrom’s old building in 2008. Westfield Topanga is also the site of a two-story 160,000-square-foot Target, which opened Oct. 6.

According to retail analyst Michael Exstein, of Credit Suisse First Boston, fashion vendors should get more opportunities at Nordstrom, because the retailer’s private label declined 20 percent to 13 percent of its fashion offerings in recent years. However, Nordstrom is at an important crossroads.

In a July 21 research note, he wrote that Nordstrom is the department store best positioned for growth and for taking market share from competitors. He also wrote that Nordstrom has gained cachet in the past few years due to the company’s core strength of service.

He argued that many competitors in the major department stores may not currently be in a position to compete against Nordstrom. For example, Federated is hunkered down with the gargantuan responsibilities of completing its 2005 merger with the May Co. Other competitors such as Saks Inc. are trying to reverse business setbacks.

However, on Sept. 26, Exstein downgraded Nordstrom stock from outperform to neutral. While the analyst still believes that the Seattle retailer should be able to hold onto its advantageous position, Exstein wrote that the valuation of the stock appeared full, and unlikely to rise, and that macroeconomic pressures, such as a slowing housing market and an uncertain consumer economy, might put brakes on Nordstrom’s rise.

From a real estate perspective, Nordstrom seems to be gaining speed. By 2010, it is scheduled to open more than 17 full-line stores. On Sept. 25, it signed a letter of intent to build a store at The Oaks shopping center. Based in Thousand Oaks, Calif., the Macerich Co.–owned mall will debut its renovation in fall 2008. The facelift will reportedly cost more than $150 million. The Oaks is located 19 miles north of Westfield Topanga.

The company opened a full-line store in Palm Beach Gardens, Fla., on March 10. It is also scheduled to debut a Nordstrom Rack store in San Marcos, Calif., on Nov. 16. According to Nordstrom’s Web site, future California openings include a store in the Westfield Palm Desert shopping center in 2009, and the relocation of its store at the Stoneridge shopping center in Pleasanton, Calif.

California may get more Nordstrom stores in the future, Erik Nordstrom said. “Our most productive stores are in California,” he said. “But getting around in California is often more of an issue of traffic instead of miles. There are opportunities to fill in and to be more convenient for customers.” —Andrew Asch