Betting The Store -- Nordstrom Has No Second Thoughts About Pinning Its Downtown Plans On The Reopening Of Pine Street
The e-mail is full of missives from shoppers threatening to desert downtown if Pine Street is reopened.
Nordstrom's phone lines are ringing with complaints from customers. And there are dark promises that a mountain of cut-up Nordstrom charge cards will rain down on a hapless customer-service department if the retailer doesn't back off its stand that Pine be reopened to traffic.
Despite all of this, if there's an eye of calm in the hurricane whirling around Pine Street, Nordstrom is firmly in the midst of it, slightly concerned, slightly bemused.
"We're not surprised," said Co-chairman Jim Nordstrom last week from Augusta, Ga., where he was vacationing.
"It's an emotional issue and . . . as someone who's downtown every day - I walk across that street every day to go to lunch - we have a lot of sympathy and empathize with the argument that it's nice the way it is."
Speaking personally, Nordstrom confessed, "I kind of like it closed."
But corporately, Nordstrom has taken a different stance. The retailer says it's not willing to move to the former Frederick & Nelson building, on Pine Street between Fifth and Sixth avenues, unless the stretch of Pine between Fourth and Fifth is reopened.
Friday, Mayor Norm Rice released a proposed ordinance to reopen the street with links to various stages in the retailer's investment in the Frederick's building. A 13-member task force would establish steps - or milestones - in the process. The street would be permanently reopened to traffic in 1997, when the project is expected to be done.
Kellie Tormey, Nordstrom spokeswoman, said she has not seen the ordinance or discussed the conditions reported in the media Saturday. She said Nordstrom executives are expected to meet and discuss the ordinance today.
If the street stays closed, that's fine, Nordstrom says. It just won't move from its current spot. Problem is, the $350 million to $450 million downtown redevelopment hinges on Nordstrom moving to the Frederick's building.
Other elements include new restaurants, multiscreen movie theaters, one or two hotels and numerous new retailers, probably including sought-after names such as FAO Schwartz and Crate & Barrel. It also includes a $68 million parking garage, to be at least partly financed by the city, with between 1,200 and 1,600 spaces.
But as crises go, this one is a minor star in the Nordstrom firmament. Seattle is a small part of Nordstrom's business these days. Even though longtime Seattleites remember when Nordstrom was just another store selling shoes, the Nordstrom of today is one of the nation's most celebrated retailers, with 77 stores across the country and annual sales approaching $4 billion. Today, its downtown Seattle store accounts for just over 2 percent of the company's total floor space.
So even though the Pine Street issue rates high on the outrage scale for local residents, Nordstrom can afford to take the brouhaha over Pine Street in stride.
Nordstrom isn't the one with the most at stake in the redevelopment project, said Jim Nordstrom. Developer Jeffrey Rhodes, who initially convinced a reluctant Nordstrom to consider moving, is. The company's initial reaction to Rhodes' proposal was to reject it, Nordstrom said, noting that Rhodes presented it when concerns about safety and parking-meter rates were paramount. But the company reconsidered when the proposal to expand the convention center was floated.
As far as the Pine Street uproar goes, Nordstrom hasn't even hired a public relations firm to deal with the fallout, said Nordstrom spokeswoman Tormey.
Maybe it doesn't need to. Tom Phillips, partner in the Seattle public relations firm of DeLaunay/Phillips, said Nordstrom is handling the hot issue quite capably on its own.
"I think they're doing as good a job as they possibly can at this point," he said.
Phillips said Nordstrom is proceeding correctly by taking a position, then sticking to it.
At the same time, he noted, Nordstrom has been smart to acknowledge that it understands how sensitive the issue is and that it's expecting a backlash - a stance that helps defuse the publicity impact of any backlash that occurs.
Still, Phillips said, it might have been better for Nordstrom to line up support from other businesses at the start, rather than weathering the criticism alone. But that's a minor quibble, he added, since the public may well have focused on Nordstrom anyway.
Nordstrom didn't weather the storm without professional advice a few years ago when the retailer and its former union were sparring over whether Nordstrom was having employees work off-the-clock without overtime pay. The flap resulted in a volley of well-publicized charges and countercharges and a lawsuit that resulted in Nordstrom paying employees back wages of several million. After a few missteps, Nordstrom lined up a smattering of top public relations talent to coach it through interviews with the likes of "60 Minutes."
Tormey said the threats - some of them sent by e-mail - to cut up charge cards so far haven't been carried out.
"It's not nearly the kind of response we'd get when we owned the Seahawks and we'd lose a game," she said.
What has hampered sales to some degree, Nordstrom believes, is the Pine Street closure.
"We don't think we've realized the kind of growth in sales that would be possible if downtown had a healthier retail core," said Tormey. The lack of access on Pine is just one of the elements that has contributed to slower growth, she said.
Nordstrom officials won't disclose sales figures for the downtown store. But the company reportedly believes a new store would have to generate at least $50 million more in sales to justify the cost.
Tormey said customers who call Nordstrom to complain seem to be mollified when the company tells them that it's not actively lobbying to open Pine Street, but merely making the opening a condition of its move.
Although Tormey now leaves instructions on her voice mail, telling those commenting on Pine Street to leave names and phones numbers, and Jim Nordstrom alludes to the family's discomfort with asking favors of City Hall, securities analysts who follow the company say Nordstrom's focus is on more important corporate matters.
For the estimated $80 million to $100 million Nordstrom would have to spend to refurbish the Frederick's building, analysts say the retailer could build several new stores in other markets.
That money could pay for "two incredibly gorgeous stores, maybe two stores and a Rack," in a new market, said Jennifer Black-Groves of Portland's Black & Co.
"I almost think that the people in Seattle are taking (Nordstrom) a little bit for granted," said Black-Groves.
Nordstrom stores are in extremely high demand elsewhere in the nation because they attract shoppers to malls and generate almost double the sales per square foot of the average department store.
Developers "will do anything to get a Nordstrom into their malls," she said. "Once they have Nordstrom, they have a mall. They can create a mall around a Nordstrom."
Other retail experts agree.
"It's a finger-licking type of situation for upscale malls," said Kurt Barnard, publisher of Barnard's Retail Marketing Report.
Elsewhere in the nation, there's a feeling that maybe Seattle doesn't appreciate the hometown retailer.
"It's ironic that Seattle, which has suffered some loss of retail stores . . . would be giving Nordstrom a difficult time," said Alan Millstein, publisher of the New York-based Fashion Network News.
"They're probably the biggest enchilada in national retailing," said Millstein. "There isn't a developer that doesn't salivate when they think about adding a Nordstrom to their shopping center."
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