Nordstrom wants its new Manhattan store to be a place where women can discover new brands

Key Points
  • Nordstrom's new Manhattan store opens Oct. 24.
  • It features a wide range of brands, from classics such as Chanel to direct-to-consumer companies like Everlane.
  • Nordstrom hopes its approach will keep customers curious and coming to its stores at a time when department store chains are undoubtedly struggling.
Nordstrom's shoe floor will sell everything from Jaggar slides to Allbirds sneakers.
Source: Connie Zhou, Nordstrom

You'll find Nike sneakers, Christian Louboutin pumps, Levi's denim and Saint Laurent dresses at Nordstrom's shiny new department store in Manhattan.

But you'll also find a slew of younger, lesser-known brands that are surging in popularity, thanks to their successful online businesses. Nordstrom is giving these brands a new bricks-and-mortar home in New York City, across a towering seven floors that span 320,000 square feet.

When Nordstrom's first full-line department store for women in Manhattan opens to the public on Thursday, at 225 West 57th St., there will be a pop-up space for Everlane, a trendy women's and men's apparel brand that started on the internet and currently only has a handful of stores in the U.S. You'll also find Birdies ballet flats, dresses from Reformation, jewelry pieces from Kendra Scott and Dirty Lemon's collagen- and charcoal-infused beverages. These are all considered direct-to-consumer brands at their core, meaning they've tended to bypass wholesale channels by selling on their own websites or in their own stores.

Nordstrom, however, in a bid to keep customers curious, has established itself as a destination for not only the classics, such as Burberry trench coats and Fendi bags, but also the up-and-comers. And this approach is seen as giving Nordstrom a leg up on the competition, at a time when department store chains are undoubtedly struggling to draw people into stores.

"I think there are a number of reasons ... why direct-to-consumer brands would want to do this with Nordstrom," Teri Bariquit, Nordstrom's chief merchandising officer, told CNBC in an interview. "It gives us exposure to customers we might not be getting, and it gives them exposure."

"It allows them to test before they scale," Bariquit added. "To see if they can keep up with demand."

She said younger brands have also been fond of the fact they can "exhaust" unsold merchandise through Nordstrom's off-price Rack locations. "It creates a whole new way for them to operate their businesses," she explained.

Nordstrom's second-level "Beauty Haven" also features a wide range of up-and-coming health brands, like Vital Proteins, Hum Nutrition and Moon Juice.
Source: Connie Zhou, Nordstrom

On the fifth level of the new Nordstrom store is a space called "Pop In @ Nordstrom," where items from Everlane will initially be housed. Every few weeks, a new brand will file in. It's on the same floor where Nordstrom will keep other "young contemporary" apparel, operating a full Topshop shop-in-shop. The teen-centric apparel retailer closed its 11 U.S. stores earlier this summer, but it's keeping its presence inside Nordstrom.

Also unique to this Nordstrom store, you'll find on the second floor items from the famous New York-based piercer and jeweler, Maria Tash, who only has one other shop, in SoHo. And a brand called Atelier VM, which is currently only found elsewhere in Milan, will weld a one-of-a-kind bracelet around your wrist using a special machine.

This Nordstrom store, which sits next door to the men's shop Nordstrom opened in Manhattan last April, has been in the works for seven years. The company says New York City is its largest market for e-commerce. But it's taken its time to find the right location for what now looks like a sprawling shrine to the Nordstrom brand, with floor-to-ceiling glass panels lining one exterior wall, opening up to a view overlooking Times Square.

"This is a big, exciting moment for us," co-president Erik Nordstrom said Monday morning during a store preview with the media. "Everything that comes to New York has to be at a standard that's our best ever. ... This building ... we think is super relevant to customers and how they want to be served today."

Still, Nordstrom's big unveiling comes at a rocky time for New York retail.

The fate of Barneys New York is still in flux after the high-end department store chain filed for bankruptcy in August. Lord & Taylor's famed Fifth Avenue store went dark. Saks Fifth Avenue shut its women's store downtown to focus on its renovated flagship in Midtown. Neiman Marcus opened a little more than six months ago at the new Hudson Yards mall on the West Side, but some analysts have said they doubt many people are actually purchasing things there.

The struggle among department store stocks is apparent. Nordstrom shares are down about 24% since January. Macy's stock has fallen 48% year to date, while J.C. Penney's stock, which trades just around $1, is down 4%. And Kohl's shares have fallen about 23% so far this year. The S&P 500 Retail ETF, meanwhile, has gained a little more than 5% during the same period.

Nordstrom, which started as a shoe shop in 1901, hopes its new flagship has enough to satisfy each customer's shopping fantasy. Maybe it's the spa, with a Dry Bar for blowouts and a Heyday for facials, on the second level. Maybe it's one of seven different eateries, including a gluten-free donut shop and a cocktail bar in the middle of the shoe floor. There is also space for its Trunk Club personal styling service — a first for a full-line Nordstrom store — and a room tucked in the corner and covered in a plush pink velvet, dedicated to all things Nike.

"We like to say we have everything from Vans to Valentinos," Bariquit said. "Customers buy Nikes with their Guccis. ... We want to be a place for everyone."

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