VOL. 121 | NO. 176 | Thursday, September 7, 2006
You Better Shop Around
By Andy Meek
Seattle-based Nordstrom Inc. has Memphis on its radar as a possible home for one of its upscale department stores within the $100 million Forest Hill Plaza commercial development being built at the intersection of Winchester and Forest Hill-Irene roads.
Nordstrom, a leading retailer with price levels comparable to Bloomingdale's and stores that can employ about 400 people at a time, also is said to be considering Nashville for the new store.
However, while no decision has been made, Memphis could have the edge.
In 2001, for example, Nordstrom officials changed their minds about developing a 165,000-square-foot store in Nashville that would have opened in 2003.
And locally, the Memphis Regional Chamber - as well as one of the city's most influential, high-level corporate executives - has been involved to some degree in the pursuit of Nordstrom, which currently has plans to open or relocate more than 20 stores nationwide by 2010.
Memphis - or Nashville?
One of Nordstrom's most recent new store announcements happened Aug. 29. The company will open a 144,000-square-foot store in Phoenix, Ariz., in 2009.
The Memphis or Nashville store would be Nordstrom's first in Tennessee.
"(Nordstrom is) an upscale department store - a good store," said Lee Harris, owner of Harris International Real Estate in Memphis. "They're not in Memphis, of course, but I'd like to see them in Memphis."
Founded as a shoe store in 1901 by Swedish immigrant John W. Nordstrom, the company currently has 156 U.S. stores in 27 states. Nordstrom reported preliminary sales of $517 million for the four-week period ended Aug. 26, up 9.3 percent from the same four-week period last year.
The Memphis site Nordstrom is eyeing lies within Forest Hill Plaza, a nearly 70-acre hotel, retail and restaurant project being developed by Chicago-based Landmark Property Group Inc. The development is in unincorporated Shelby County and is due to be annexed by Memphis in 2013.
A 300-room hotel and pier will overlook a lake at Forest Hill Plaza. The surrounding land includes Windyke Country Club, an office building and apartment communities to the west. Christ the Rock Christian Academy and Forest Hill Baptist Church sit immediately to the north.
The developers currently have about five letters of intent from large potential tenants, said Charles Wurtzburger, who for 40 years has owned the land where Forest Hill Plaza will be built.
"(Forest Hill Plaza is) really going to be upscale, not like any of the other shopping centers in Memphis. We're trying to get people who are not in Memphis presently as our anchors."
- Charles Wurtzburger
Founder of Cleo Wrap Inc.
The addition of Nordstrom, as well as some of the other upscale touches Landmark is planning, would easily propel the entire retail center into competition with The Avenue Carriage Crossing in Collierville, an open-air mall about three miles away.
The Shops of Saddle Creek in Germantown is about five miles from Forest Hill Plaza.
Wurtzburger, who founded wrapping paper company Cleo Wrap Inc. in the 1950s, expects the new commercial destination to draw shoppers from as far as an hour and a half away.
"It's really going to be upscale, not like any of the other shopping centers in Memphis," Wurtzburger said. "We're trying to get people who are not in Memphis presently as our anchors."
A fine poker face
No one close to the project is announcing anything yet about potential tenants, and Nordstrom is not confirming any interest in Memphis.
"We don't have any current plans to announce, and typically we don't talk about specific locations until we have a signed letter of intent," said Nordstrom spokeswoman Amy Pobst. "But we're always looking at opportunities across the U.S."
However, some agreements related to Forest Hill Plaza could be close to being finalized. Wurtzburger mentioned letters of intent with some tenants, and Ed Pilarz - co-founder of Landmark - said construction will start on Forest Hill Plaza in the spring.
"We've got our approvals from the city of Memphis, we're talking to a lot of great tenants and we're really excited about the project," Pilarz said. "We can't announce anything yet - we've got to wait until everything's fully signed.
"But we're talking to all the major food and entertainment and retail (names) that aren't there in the market today."
A rich addition?
If Nordstrom does decide to be part of the project, it would cap a season of rapid growth for the company.
At the same time back-to-school shopping was propelling the August sales of some national retailers, Nordstrom released numbers last week showing a 7.1 percent same-store sales increase, more than double the increase analysts had predicted.
This year, the company is opening a new store in San Marcos, Calif., and relocating another store in Canoga Park, Calif.
But Danny Buring, managing partner at The Shopping Center Group Inc., said Nordstrom isn't coming to Memphis any time soon, even if the company likes what it sees at Forest Hill Plaza. The Shopping Center Group is helping sell the land for the development.
"I think (Nordstrom) likes the real estate and the demographics, but Memphis still may or may not be on their radar screen yet," Buring said.
In a previous interview, Memphis developer John Elkington estimated the average household income within a mile of Forest Hill Plaza at $125,000, and within three miles at about $94,000.
"It's going to have sort of a Tuscany, European feeling," Wurtzburger said of the finished project. "There will be walking streets in addition to the anchor stores, and some of the stores we're talking to are not in Memphis in any other location."