Shopping Centers and Circle Centre and Retailers and Fashion Mall at Keystone and Retail

Nordstrom: Weak sales prompting closure of Circle Centre store

May 26, 2011

A top Nordstrom Inc. executive said Thursday morning that the company chose to close the downtown Indianapolis store after sales plummeted when it opened a north-side location in 2008.

Nordstrom President Erik Nordstrom flew in from the Seattle-based company’s headquarters to notify the downtown store’s 176 employees that the store would close on July 31.

IBJ was first to report the store's closing early Thursday morning.

In addition to its store at The Fashion Mall at Keystone Crossing, the upscale retailer will open its off-price Nordstrom Rack store in September at the nearby Rivers Edge shopping center at 82nd Street and Dean Road.

Between the two stores, 97 jobs should be available to workers at the Circle Centre mall location, Nordstrom said. A severance package will be available to employees who aren’t offered jobs but stay until the downtown store closes.

Sales have fallen by roughly half since the Keystone Crossing store opened, a decline company officials did not anticipate, Nordstrom said.

“That really surprised us,” he said. “We have multiple stores in many markets.”

In addition, he said the downtown store is in need of a remodel, and the company wasn’t prepared to invest the money in it given the disappointing sales. The lease for the 210,000-square-foot store, which opened in 1995, is up for renewal this year.

Having a second Indianapolis Nordstrom was such a big concern for the mall developers back in the 1990s that they extracted an unusual concession from the company: that it would wait at least five years before opening another Indianapolis-area store.

The city originally enticed Nordstrom to open in the $319 million mall by offering a new building and tenant improvements at no upfront cost to the retailer. How much Nordstrom pays in rent is not spelled out in publicly available documents.

The downtown store opened well in terms of sales but couldn’t sustain momentum. Sales peaked in 1997, said Nordstrom, noting that convention visitors who shop at Circle Centre aren't picking up enough of the slack for downtown residents and workers.

The Keystone Crossing store is performing much better, Nordstrom said.

“Given the mass of retail in that Keystone/Castleton area, there’s just a lot more retail there,” he said. “We do better when there’s a lot of retail around us.”

Nordstrom said the downtown store’s closing is an isolated decision and not part of any larger plan to shut other locations.

“It’s very rare for us to close a store,” he said.

The official decision to shut the Circle Centre store wasn’t made until about a week ago, Nordstrom said.

Founded in 1901, Nordstrom has 214 stores in 29 states.

Its only Indiana stores are in Indianapolis.

 

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