What: Nordstrom is betting on its off-price stores with plans to open 20 new stores this year as consumers become more value-conscious.

Why it is important: The brand has remained a weak spot in the company’s portfolio, and its success or failure could shape the company’s future.

In FY 2022, Nordstrom Rack reported sales below pre-pandemic levels and in the holiday quarter, its sales dropped 8%. Despite these numbers, Nordstrom is looking to turn the brand into a growth driver as discretionary merchandise is under pressure as a result of inflation.

Nordstrom Rack has formed a dedicated leadership team and also focused on its best-selling brands as part of its strategy. The off-price retailer’s competitors, such as T.J. Maxx, Ross Stores, and Burlington stores, have seen success in opening more stores and driving higher foot traffic, while also seeing higher sales in comparison to the Rack.

The retailer plans to open nearly 30 new locations within the next two years as it hopes to turn the chain around during a “golden moment” for off-price as many retailers and brand have excess inventory.

As shoppers look for savings, Nordstrom hopes Rack stores can fuel its revival