Nordstrom to open concept store in New York City
TEXT OF STORY
Kai Ryssdal: We’re going to pause for a moment now to talk about corporate giving — and perhaps, corporate getting. Nordstrom, the big retailer out of Seattle, says its going to open a store in New York. All the profits from which will go to charity. All. Profits. Sounds on the face of it like a pretty good corporate deed. But cynics among us might well wonder, with the economy making retail triple markdowns a fact of life, who do you suppose is getting more out of this arrangement — the charity or the company?
Marketplace’s Janet Babin reports.
Janet Babin: Nordstrom will open its philanthropic concept store in Soho, a hip, high traffic neighborhood. Rents there are pricey; they average about $200 a square foot. So, why would Nordstrom donate the profits from this new store to charity?
Retail analyst Patricia Edwards at Trutina Financial has one answer.
Patricia Edwards: I think this is a fantastically crazy idea, because it not only benefits the charities, but it also improves the Nordstrom brand in Manhattan where they want to be able to bring a full-line store.
Nordstrom has wanted to open a flagship store in New York for years. It’s new store, will be just a few corners away from New York icon, Bloomingdale’s — with the added benefit that you don’t have to feel guilty about buying that Marc Jacobs bag when you know the proceeds will go to charity.
Social entrepreneurs and philanthropy experts applaud Nordstrom’s plans — with some reservations.
Christopher Gergen: You want to be careful that it’s not seen as being exploitive.
That’s Christopher Gergen, with the Hart Leadership Program at Duke University.
Gergen: Consumers are getting more and more sophisticated. And if they feel like they’re getting taken for a ride — they’re basically just providing a lot of marketing bump for Nordstrom — that’s going to create a level of cynicism that’s going to be hard to recover from.
Many of details about the new store remain sketchy. There’s no name for it yet, but it won’t be called Nordstrom. And it won’t be a mini version of the department store. A spokeswoman says Nordstrom hasn’t decided which charities will benefit from the store’s profits, and those profits could be pretty slim by the time it opens next fall. Profits at nearly all retail stores have been hammered since the recession. Nordstrom’s fell from about 8 percent a few years ago to 5.8 percent last quarter.
In New York, I’m Janet Babin for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
