Nordstrom considering Manhattan site for Rack store

Seattle-based retailer Nordstrom might soon put a store in Manhattan, just not the flagship that had been talked about.

Reporting from a large gathering of shopping-center owners this week in Las Vegas, Women's Wear Daily said Nordstrom appears ready to open a Rack store on Union Square, where a Virgin Megastore used to be.

Nordstrom spokeswoman Julee Kraus confirmed the retailer's interest in the site but said no deal has been made.

"We've looked at the Union Square area for some time, and it's definitely something we'd like to see," Kraus said. "But there's nothing to report at this time."

Nordstrom looked in Manhattan several years ago for its first full-line clothing store there. President Blake Nordstrom told a Bellevue Chamber of Commerce crowd last summer that the company almost had a deal for the Drake Hotel site at Park Avenue and 56th Street, but would-be developer Harry Macklowe ran into financial problems. He said the rental rate, at more than $45 million annually, was a "little scary."

Union Square is bounded by 14th and 17th streets, with the Flatiron District to the north, Chelsea to the west and Greenwich Village to the south.

Nordstrom's off-price Rack division has been a bright spot in the current recession. Sales at Rack stores open at least a year increased 1.2 percent for the first quarter, compared with a 16.5 percent decrease among full-line stores.

Nordstrom has opened five new Rack stores nationwide this year, with eight additional planned for late summer and fall. That's up from a total of six new Rack stores in 2008.

"In part, we're playing catchup with our full-line store growth," Kraus said. "And in part, we're finding great opportunities."

Nordstrom opened eight new full-line stores nationwide last year and plans three new full-line stores this year.

The company operates 111 full-line stores, 61 Racks, two Jeffrey boutiques, and two clearance outlets.

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com