Nine months after opening its first Nordstrom Local store in West Hollywood, Calif., Nordstrom has unveiled plans to expand the inventory-free concept to additional neighborhood hubs in Brentwood, Calif. and downtown Los Angeles this fall. While the original location is 3,000 square feet, the Brentwood and Los Angeles locations will be smaller: 1,200 and 2,200 square feet, respectively.
Like the first Local store, these locations won’t be selling any apparel, footwear or accessories. Instead they are designed to offer customers experiential services and fulfillment options such as on-site tailoring and alterations, curbside pickup, buy online/pick up in-store and returns. The West Hollywood location even included a nail salon and a bar, but it is unclear whether the two new stores will offer those kinds of services.
Los Angeles is Nordstrom’s largest market, with 16 full-line stores and 4 million customers. Although Nordstrom hasn’t revealed any more locations for future Local stores, the company does have plans to extend the concept to New York City, according to Fast Company. Nordstrom already is in the process of building its first full-line women’s store in NYC and opened a men’s shop near Columbus Circle earlier this year.
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Despite the name, don’t expect many of these “Local” stores to expand beyond major U.S. markets just yet. Approximately 60% of Nordstrom’s sales are from its top 10 markets, the company revealed in its investor meeting. The New York and Los Angeles markets account for 20% of total sales combined, and with new store openings this year, the retailer anticipates that the two markets will generate approximately 25% of its full-price business.
Nordstrom unveiled the news only a day before meeting with investors, following the family’s failed attempt to take the department store chain private earlier this year. The family was unable to get the financing needed to secure a deal at an acceptable price.
The retailer hopes that the Local stores will support its ambitious growth strategy, which projects EBITDA growth of 5% to 6% on an average basis from 2017 to 2022. Additionally, the company estimates that annualized sales will rise between 3% and 4% over that time, outpacing the 1% average annual growth projections for the apparel and footwear market.
