The Shophound

MERGERS & ACQUISITIONS: Nordstrom Takes A Bite Of Bonobos

It's a win for both sides as Nordstrom has made a $16.4 million cash investment in Bonobos, the New York based men's sportswear company. For the online-only brand, it will be an opportunity to launch their product in one of America's most popular department stores with a perfectly matched target customer. Bonobos made its reputation by banishing the baggy khaki pant and creating upscale men's trousers that fit so well that they could be purchased online without being tried on in person. Now expanded to a full sportswear collection, the label will be make its retail debut exclusively in Nordstrom's infuential men's departments.

In addition to launching a popular line, Nordstrom's investment will also allow the seattle-based chain to take advantage of the prodigious online retailing expertise cultivated at Bonobos to enhance its own evolving web business. Quiet, clever acquisition has been a business strategy for Nordstrom for a few years now. While it has not purchased Bonobos outright, the store recently got into the online flash sale business by buying HauteLook, and many customers remain unaware that the exclusive Meatpacking District boutique Jeffrey is also owned by Nordstrom, and its founder, Jeffrey Kalinsky is the chain's Executive Vice President of Designer Merchandising. There is no word that Bonobos co-founder Andy Dunn will be taking on an official role at Nordstrom, but should the 116-store chain increase its investment by buying the company, it's hugely successful but extremely conservative men's business could benefit from the fashion shot-in-the arm that Dunn could offer.

As for us in New York, we still don't have our own Nordstrom yet (though we are the only city with the chain's Treasure & Bond division and there are rumours of another Rack coming to Sixth Avenue in Chelsea). This news continues to keep Nordstrom's status as the most fascinating store we can't shop at just yet.

Stores Go Online to Find a Perfect Fit (NYTimes)

JON CARAMANICA GOES SHOPPING: Off-Price Stupor Edition

This week's Thursday Styles finds Critical Shopper Jon Caramanica thoroughly nonplussed by the much heralded Nordstrom Rack now occupying part of the Virgin Megastore's carcass on Union Square. As he desperately combs the store's packed racks for something, anything to buy, he comes to  the conclusion that shopping off-price is not unlike shopping at thrift stores,

Boosters of shopping for used and vintage clothing like to portray it as a thrilling hunt, but really it’s a series of compromises: Will you find a piece that’s not exactly what you came in the door looking for, forgive its flaws and take it home?

After hours of rummaging, Caramanica discovers a shirt he can live with from the kind of mystery label that seems to live only in off-price stores. Overall, he surmises that even the deeply discounted offerings from familiar designers at the Rack are typically hopelessly flawed.

A silvery lambskin jacket by John Varvatos ($800, from $2,595) fit perfectly, but it glowed bioluminescently under the drowsy lights. Its tag marked it as a limited edition, No. 25 of 52, though a fuller search of the rack turned up Nos. 2 and 6 as well. Somewhere, a protean boy band is without its next stage outfit. A black Burberry trench coat ($400, from $1,195) was slick, but its padded lining gave it a Kevlar-y bulk.

And so the initial glow of novelty appears to have faded from the Rack as it fades into the growing morass of off-pricers (TJ Maxx, Filene's Basement, Syms, Century 21, etc.) now dotting the city.

Can we just have a real, full-line Nordstrom now?

Critical Shopper | Nordstrom Rack: Bargain Hunting Begins to Wear on You By Jon Caramainca (NYTimes)
Nordstrom Rack 60 East 14th Street between Broadway & Fourth Avenue, Union Square

RENOVATION REVELATION: Nordstrom Rack Will Live Downstairs

Nordstrom Rack opens in 4 days, and we have to make a correction.

About a month ago, we posted a photo of what we assumed would be the interior of the upcoming department store chain outlet's Union Square location which used to house Virgin Megastore. Its raw state made us wonder if the store could possibly be ready on time. It turns out that Nordstrom Rack appears to be taking mostly the underground space that held Virgin, which is why they are not using the corner marquee that was the previous tenant's entrance. The space pictured in last month's post is not part of Nordstrom Rack. The street level square footage remains unoccupied. From what we could tell today, rather than waiting for another large retailer to take the space, it is being divided up to accommodate a few smaller stores.

Sorry for our mistake. It looks like the store will have no problems being ready for May 11th.

Previously:
Renovation Revelation: Will Nordstrom Rack Be Ready In Only Five Weeks?

Renovation Report: Nordstrom Rack Starts From Scratch

We are pretty sure that the plywood is going to be restored any day now, but this morning everyone in Union Square got an eagle-eye view of what kind of the renovation is going on in the former Virgin Megastore site for the incoming Nordstrom Rack unit.
We certainly weren't expecting them to retain any of Virgin's interior, and it looks like the entire space has been fully gutted. Even the escalator atrium has been completely filled in for more main floor space. Presumably, some other passage to the lower level is in the works. Virgin's former awkward, dead-zone-ey storefront is also being completely reconfigured with a lot of glass, although, strangely, nobody has yet seen fit to remove the marquee which still features the music emporium's sad, darkened sign.

Union Square Update: Nordstrom Finally Enters Manhattan ...Outlet First

As has been rumored for quite a while, Nordstrom is finally coming to New York City, but not in the way we were expecting. The popular Seattle based retailer will take the space vacated earlier this year by The Virgin Megastore at One Union Square South, but they will be installing a Nordstrom Rack outlet rather than a full line store.
The rumor mills have had quite a few locations pegged for a Nordstrom flagship, most recently the former Drake Hotel location on Park Avenue, but none of those stories have yet panned out.
It's a little unusual that a major upscale chain like Nordstrom would choose such a high profile location for its outlet division, which are usually clustered near other like chains such as Saks' Off 5th or Neiman Marcus Last Call, typically kept far away from their full-price siblings. While Union Square is also home to Filene's Basement and DSW, it's not especially known as a designated outlet area, and one would expect a big player like Nordstrom to enter a pivotal market like Manhattan with a full line flagship before adding outlet units. The chain, however, is notoriously picky about locations for its stores, and clearly not willing to pass up a space like this one on Union Square which would be unsuitable for its top line, but obviously great for a Rack.
Their press release also indicates that, as many have predicted, Circuit City' former space at the other side of the building will be taken by Best Buy this fall with a smaller store than its Sixth Avenue and Columbus Circle branches, but one far more conveniently located.
Nordstrom Rack is slated to open this spring, and as for that flagship, we're all still waiting.
Nordstrom Rack to Open First Manhattan Store at One Union Square South (PR Newswire)

Nordstrom Likely To Hit Manhattan ...But Not The Way You Expect

WWD is reporting today that Nordstrom is thisclose to taking a substantial portion of the soon-to-be vacated Virgin Megastore space on Union Square It won't be for a full line store however. The lower level is said to be under consideration for a Nordstrom Rack, the chain's growing outlet division.
Most big chains like Neiman Marcus and Saks Fifth Avenue are looking to their discount clearance outlet divisions (Last Call and Off 5^th, respectively) to bolster business as their regular stores struggle. Nordstrom's outlet is no stranger to the area. There are Rack stores circling the city in Paramus, New Jersey, White Plains and Westbury, New York. Nordstrom also quietly owns Jeffrey in the Meatpacking District and operated the Façonnable boutique on Fifth Avenue until it sold the brand a few years ago.
While this move is something of a surprise, since the Seattle based department store chain has long been rumored to be searching for a suitable site for a Manhattan flagship, it is understandable given the current climate.
It looks like Manhattan will have to wait a bit longer for its own proper Nordstrom store, but, in fairness, there isn't exactly a burning demand for one at this very moment.
Nordstrom Eyes Manhattan Rack Unit (WWD)

Nordstrom And Pete Wentz Go Steady

Let's face it. Recording artists do not make any money of music sales anymore, especially not younger ones who have unfavorable "New Artist" record deals. The bottom is falling out of the CD market, and even the most ardent fans can't resist downloading music for free online. Enter Pete Wentz of the popular band, Fall Out Boy.
Wentz has already found all sorts of clever ways to hold the media's eye, but he has also shown a keen commercial sense. Last year, his nascent clothing brand, Clandestine Industries, did a limited collaboration with DKNY Jeans, and next month, a new line produced in conjunction with Nordstrom, including items like the $38 t-shirt pictured here, will appear at 600 of their stores.
And just how did the Seattle based retailer fall in with the Pop punk/emo-rocker from Chicago? Wentz tells WWD:

"After the deal with DKNY Jeans, which, I have to say, was awesome for me, the best partnership I've been in so far — there were a couple of places which were expressing interest in working with us," Wentz said. "I really liked Nordstrom because of their openness. They were really open to allowing me to do what I wanted to do and they wanted the brand to speak for itself. They let Clandestine be Clandestine, which is nice."

It's a win for both sides. The middle-of-the-road retailer is able to make inroads with the young TRL crowd that comprises Fall Out Boy's fan base, and Wentz creates a revenue stream to substitute for what one would have thought he would ahve made from CD sales. After all, why else do you think someone like Jessica Simpson is in the clothing business? It's certainly not because she's a designer.
Wentz to Do Nordstrom Exclusive (WWD)
Clandestine Industries preview at Nordstrom HERE

Nordstrom's Park Avenue deal on the Rocks?

It was looking promising there for a while.
Nordstrom's plan to open a Manhattan branch ithe site of the former Drake hotel at Park Avenue and 56th Street looks like it's in big trouble. The Seattle based specialty chain had signed a letter of intent to use the site where the hotel once stood, but the developer, Macklowe Partners, was served with a notice of default last week after some refinancing negotiations fell through, putting some of their properties in jeopardy. The typically cautious and prudent Nordstrom would naturally not be comfortable making plans on a site whose ownership is possibly in flux. The deal is not over yet, but it is looking likely that Nordstrom will pull out if their developer can't show more stability.
Stay tuned. This story continues to develop.
It's Tough in New York: Nordstrom Hits Hiccup Securing Flagship Site (WWD)
Previously: Nordstrom Moves One Step Closer..Maybe 

Nordstrom Moves One Step Closer..Maybe

Nordstrom is gingerly inching ever closer to a Manhattan location. WWD reports that the Seattle based chain has signed a non-binding letter of intent on the northwest corner of 56th Street and Park Avenue, the former home of the Drake Hotel. The site would allow for the 200,000 square feet of floor space the retailer requires as well as an appropriately high profile and well placed store entrances.
What the agreement means, however, is basically that Nordstrom has committed to further negotiations with Macklowe Partners, the building's owner, for the site, and could still ultimately settle on another location. It is a step forward, though, and a deal could potentially change the retail landscape of Park Avenue, expanding the midtown shopping district even further.
A Piece of Manhattan: Nordstrom Gets Serious About Park Avenue Site by David Moin (WWD)
Previously: Nordstrom Finds a Space on Park Avenue...or Maybe Not...Just Loooking...and Other News