Nordstrom opens its first Manhattan store

At long last Nordstrom is taking Manhattan. The Seattle-based retailer said Tuesday it will open an off-price Rack store next spring at Union Square, a large commercial hub in Lower Manhattan.

The store represents Nordstrom's first Manhattan location after 108 years in business — a much-anticipated milestone it nearly achieved several years ago.

Then, Nordstrom almost had a deal for a full-line flagship on Park Avenue, but would-be developer Harry Macklowe ran into financial problems.

Now, Nordstrom Rack is taking the lower level of a former Virgin Megastore at the Related Companies' One Union Square South, a tower with apartments above a five-story block of retail that includes Regal Cinemas and a soon-to-open Best Buy.

"They're doing what's right for the right part of Manhattan," said Sam Poser, an analyst who follows Nordstrom for Sterne Agee & Leach in New York. "It's a more moderate shopping area than Park Avenue."

Poser said he expects the new store to generate significantly more than the $16 million that he estimates an average Rack location rings up annually. "There's a ton of traffic because subways go through there, and a lot of people live and work in the area."

Nordstrom noted that 12,000 businesses employ about 140,000 people within a half-mile of Union Square. It's bounded by 14th and 17th streets, with the Flatiron District to the north, Chelsea to the west and Greenwich Village to the south.

The Union Square site gives Nordstrom 30 feet of street-level storefront — a premium commodity in Manhattan. The location covers 32,136 square feet, putting it on the small side for new Rack stores, which range between 28,000 and 41,000 square feet, according to Nordstrom spokeswoman Brooke White.

Manhattan marks Nordstrom's 10th new U.S. market since 2003 and will come on the heels of its debut this year in Cincinnati.

The company typically introduces itself with a full-line clothing store, though not always. It entered Honolulu in 2000 with a Rack store after efforts to secure a full-line location there stalled. Eight years later, in 2008, it opened a full-line store at Honolulu's Ala Moana shopping center.

Nordstrom is still looking for a place in Manhattan to put a full-line clothing store, White said.

"Manhattan real estate is very hard to come by," she said. "With a Rack, there were more options available to us, and we wanted to not pass this opportunity up."

The company will make sure "people understand this is a Nordstrom Rack and not a Nordstrom store," White said.

Outside Manhattan, Nordstrom has eight full-line stores and three Rack stores in New York, New Jersey and Connecticut. That nearby presence lessens the chance that Manhattanites will form an impression of Nordstrom based solely on the new Rack store, Poser said.

"People get that there's a difference" between Rack and full-line Nordstrom stores, he said. "New York City consumers are pretty educated people."

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