Nordstrom is beefing up its department store portfolio at a time when we are constantly being told the department store is dying. This summer, Macy's announced it was closing 15 percent of its American stores after six straight quarters of declining sales. Since 2014, J.C. Penney has closed 80 locations; Sears closed nearly 300. According to the US Department of Commerce, department store sales have declined 30 percent from $87.46 billion in 2005 to $60.65 billion in 2015. ... Department stores face a grim future, and it gets even gloomier when Amazon, which is set to outpace them in apparel sales, is factored into the equation. Yet Nordstrom is envisioning eight stores in Canada and three more new stores in the US by 2019, including a flagship in New York City. ... This focus on shoppers starts first and foremost with its generous return policy — or generous lack thereof. ... In addition to transparent customer relations, Nordstrom stocks an impressive mix of higher- and lower-end brands, without managing to alienate anyone. ... The changes are small and incremental, and yet they complete a larger picture for the Seattle-based brand. They don't just give the store a contemporary, boutique-y feel — they're clear indicators that Nordstrom has put a whole lot of thought into what a department store should look like in 2016 and beyond.
Before the American Dream was the American Dream, it was Xanadu. When ground broke on the site in 2004, hundreds of guests attended a million-dollar party, with martinis in one tent and artificial snow in another. Xanadu’s developer, Mills Corp., completed most of the main building before running out of money in 2006. A second developer ran aground in the Great Recession. The Trump Organization, among others, decided against taking on Xanadu, which sat vacant and ridiculed, having already cost developers $2 billion. ... The Ghermezian family story, the one they don’t often talk about, begins in Central Asia in the early 20th century. Jacob Ghermezian, Don’s grandfather, operated a large bazaar in the Uzbek city of Samarkand, until the Russian Revolution abolished private property. He moved to Tehran and built a real estate fortune whose centerpiece was a complex with shopping, entertainment, apartments, and offices ... In the 1950s, amid political and economic uncertainty, Jacob, his wife, Miriam, and their four sons—Nader, Raphael, Bahman, and Eskandar, who is Don’s father—left Iran for North America. ... Like most real estate developers, the Ghermezians depend on other people’s money to build. The larger the project, the riskier it is to investors, because the steep initial cost comes far in advance of the revenue.
Hundreds of shopping centers across the U.S. are facing obsolescence, abandoned by shoppers who are going online or getting choosier about where they shop. ... in its combination of novelty, technology, and customer pampering, Roosevelt Field embodies the strategy that has helped its owner, Simon Property Group, navigate retail’s crisis to stay on top of the mall world. ... Its U.S. portfolio includes 108 malls, most of them high-grossers like Roosevelt Field, and 72 discount outlet centers. ... including the Forum Shops at Caesars Palace in Las Vegas, King of Prussia outside Philadelphia, and the huge high-end New York outlet mall Woodbury Common ... The key to that success: constantly adapting to figure out what sells, at a time when many of the businesses that fill its malls—especially department stores and apparel retailers—aren’t selling. ... Simon dominates the so-called A-malls, those with the highest sales per square foot. To win in that category, Simon has been diligent about staying ahead of trends and modernizing its centers, and quick to replace struggling brands with those on the upswing. ... acknowledge the risk posed by the wave of store closings. ... Analysts generally believe America is “overmalled” to begin with: There are 2,353 square feet of space of shopping centers in the U.S. for every 100 Americans, compared with 1,636 in Canada and 458 in Britain ... From the 1960s through the 2000s, developers built hundreds of malls per decade. But since 2010, only nine new ones have been built ... the typical anchor store pays around $4 per square foot in annual rent; the average non-anchor tenant paid $42.22 per square foot a year as of the third quarter of 2016