News and analysis
October 29, 2010

Nordstrom to Open N.Y. Store to Aid Nonprofits

In a novel experiment in philanthropy, one of the country’s best-known clothing retailers says it is opening a store where all earnings will go to nonprofits. A spokeswoman for Nordstrom says it expects to open a store in Manhattan in the trendy Soho neighborhood sometime next year. But the company cautions fans of the upscale department store chain not to pull out their Nordstrom charge cards.

“The store will have its own identity,” says Pamela Lopez, spokeswoman for the Seattle company. “So you aren’t going to see the Nordstrom signature, there won’t be Nordstrom shopping bags, and we won’t be accepting Nordstrom credit cards. It’s not a Nordstrom store.”

So if it’s not a Nordstrom store, what is it? Ms. Lopez says that Nordstrom isn’t ready to talk yet. She would only say that the store would be “unique.” (It appears the brokers that negotiated the lease may have announced the deal before Nordstrom was ready to go public.) But Goodwill Industries and other charitable shops have nothing to fear. The store, says Ms. Lopez, won’t be selling used clothes.

Michael Bisesi, director of Seattle University’s Center for Nonprofit and Social Enterprise Management, says this is the first he has ever heard of a for-profit retailer opening a store with all profits going to charity. Though few details have been released about the venture, Mr. Bisesi notes that Nordstrom is not a small company and the impact could be huge.

“It’s a worthy experiment,” he says. “This will be a very distinctive enterprise.”

Philanthropy Leaders

Nordstrom, which sells clothing, accessories, and cosmetics, has a stellar reputation in the nonprofit world. Nordstrom family members don’t just give away money, says Mr. Bisesi; they are known for giving their time. They have served on boards, such as the local United Way in Seattle, helping to make it the largest in the country.

“Their leadership is agenda-setting,” he says. “This could be a very good role model for other companies.”

Nordstrom does hope to profit from the venture, though it may not initially be in dollar terms. The 109-year-old company, which began as a shoe store, has been trying to get a toehold in Manhattan for years. Nordstrom opened a low-cost sister store in New York last year, but it is still actively looking to establish a flagship in the city. “We have had aspirations to have a store in New York,” says Ms. Lopez. “Anything we can learn about Manhattan [retail] can be valuable.”