Nordstrom is preparing to open more smaller stores with no inventory.
The company said Monday, ahead of its investor meeting in West Hollywood, California, that it will open at least two more Nordstrom Local shops in Los Angeles and is eyeing New York for expansion.
Fast Company first reported the news.
Late last year Nordstrom opened the first Nordstrom Local on Melrose Avenue in Los Angeles. The store, roughly 3,000 square feet, has a nail salon, a bar stocked with beer and wine, a seamstress and ample fitting rooms. But you can’t buy any clothes there. You can have online orders shipped to Nordstrom Local for pickup, but the goal is for the smaller spaces to be experiential and service-oriented.
The expansion for Nordstrom comes at a time when retailers across the U.S. are grappling with how to compete in the age of Amazon and as more shoppers are ringing up purchases online. Nordstrom in particular has many locations at shopping malls, which are seen as less appealing to some consumers today.
"Nordstrom is continuing to invest in its growth strategy with the goal of increasing market share by providing customers with better and more convenient services and access to more products," Ken Worzel, president of Nordstrom.com and its chief digital officer, said in a statement.
He said the company has been able to combine “the scale of our national infrastructure with our local assets of people, product, and place to help reimagine the shopping experience.”
Seattle-based Nordstrom has said Los Angeles is the department store chain’s largest market, with more than a dozen full-line locations scattered across town.
Shea Jensen, senior vice president of customer experience at Nordstrom, said at the ShopTalk conference in Las Vegas earlier this year that the company was learning a lot from its shop on Melrose Avee., which would help it ahead of a grander rollout.
Nordstrom said the new locations in Los Angeles — one in Brentwood and one downtown — would be tailored specifically to those neighborhoods. It hasn’t yet revealed an address for a New York store but is in the process of constructing its first full-line department store for women in the city. It just opened a men’s shop near The Shops at Columbus Circle earlier this year.
On Tuesday, Nordstrom will hold a meeting with investors and give them a tour of the Nordstrom Local on Melrose Avenue. Industry analysts are hoping to learn more about the company’s goal for the smaller stores and receive an update on its progress with its off-price business, Nordstrom Rack, which has been struggling of late.
“As the retail landscape remains highly competitive and challenging, we admire the initiatives that Nordstrom continues to implement to solidify its place as a best-in-class multi-channel retailer,” Telsey Advisory Group analyst Dana Telsey said in a note to clients Monday morning.
“However, earnings growth for at least the medium-term appears muted due to softer top-line performance and margin pressure from investments in long-term growth initiatives, among other factors.”
Nordstrom shares are up more than 12 percent so far this year. But on Monday they were trading down nearly 2 percent, just below $53. Over the past year, the stock has traded as high as $54.11 and as low as $37.79.