Nordstrom Rack said Tuesday that it would open a 39,000-square-foot store next fall at the corner that once housed Daffy's, a deal striking at downtown Philadelphia's image as lacking large, must-visit shopping destinations for the designer set.
The high-profile signing by building owner JEMB Realty Corp. could signal a major shift in shopping routines for residents who now grudgingly trudge to King of Prussia or Cherry Hill to browse buzzy retailers that have shunned the city's resurgent center for tried-and-true suburban malls and their capacious digs.
Nordstrom Rack was so eager to open its first Philadelphia store at 17th and Chestnut Streets that it is making do with a footprint that will require significant, if potentially stunning, renovations before the store debuts in a building that is nearly a century old.
"We think it's a great retail area," said Kate DeToye, a spokeswoman for the Seattle-based retailer, which had considered opening stores in Philadelphia for years but had not pulled the trigger until now. "We think that we can make a really shoppable, interesting, hip store there."
Shoppers in search of discounted Nordstrom brands will indulge in three floors of selling space that had housed seek-and-find retailer Daffy's, which rewarded patient scavengers with designer threads at bargain prices. (Nordstrom Rack will use a fourth floor for storage and offices.)
An open staircase will be constructed to connect shoppers on all three floors, instead of forcing them to rely only on the elevators in what opened as Bonwit Teller & Co. in the 1920s, said Larry Steinberg, senior vice president of CBRE Inc., who with vice president Paige Jaffe brokered the deal.
Also planned: construction of a 17th Street lobby for elevator access to the still-unoccupied five floors above Nordstrom Rack, Steinberg said.
The 10-year lease is expected to generate more than $20 million in rent, he said, noting, "We talked to over 20 qualified retailers of that size and ilk," including Lord & Taylor and Forever 21.
Nordstrom Rack had been interested since Day One, when Manhattan-based JEMB, having acquired the building through the Daffy's bankruptcy, first marketed it, Steinberg said.
As the upscale outlet-style sister of the full-line Nordstrom department-store chain, Nordstrom Rack has been on an expansion binge in recent years: It has 132 U.S. stores and hopes to have 230 by the end of 2016, said DeToye.
Prices are 30 percent to 70 percent lower at the Rack than on brands found at the pricier department store, said DeToye.
For years, landlords and others have lusted after Nordstrom to become Center City's second department store behind Macy's. And time and again, Nordstrom Inc. instead built stores in King of Prussia, Cherry Hill, and Newark, Del.
Yet the Rack was being embraced Tuesday with excitement.
"My reaction was, 'Fabulous!' " said Michelle Shannon, who as vice president of marketing and communications at the Center City District has in recent years taken on a proactive role in pitching the downtown to prospective national retailers. "It says that an upscale retailer like Nordstrom sees their market here in Center City."
The Nordstrom Rack deal, like other recent signings with national cachet, points to the likelihood of more to come, said Shannon.
The former Daffy's building is an 80,000-square-foot structure with a basement and wraparound display windows. Upper floors remain vacant and on the market, Steinberg said.