New Nordstrom Store in Macerich Mall - Analyst Blog

The Macerich Company (MAC), a leading real estate investment trust (REIT), has recently announced the opening of a specialty fashion retail store by Nordstrom Inc. (JWN) in Santa Monica Place, a shopping mall in Santa Monica, California.

 

The new Nordstrom store will showcase an optimum mix of clothing, accessories, shoes and cosmetics for women, men and children. The retail store would also offer in-store alterations, tailoring, and Personal Stylist – a complimentary wardrobe and shopping service – to enhance the shopping experience. In addition, the store will feature a Blue Stove restaurant and an espresso bar.

 

Santa Monica Place was lately refurbished to transform it from an enclosed, old-style mall into a modern, open-air center with novel retail offerings and an impressive rooftop Dining Deck with views of the ocean. The third level of the 524,000-square-foot shopping center would be entirely dedicated to food, including six chef-driven restaurants on the rooftop serving high-quality organic and gourmet foods.

 

With the refurbished look, Macerich expects Santa Monica Place to develop into one of the premier shopping centers in the U.S., complimenting its strong portfolio of A-quality malls in some of the most attractive markets in the country. The mall is also generating significant interests among luxury retailers with the most sought-after demographics.

 

Macerich is one of the largest operators of regional and community shopping centers in the U.S., with assets in high barrier-to-entry markets that have fared relatively well despite the challenging times. The company also has a strong balance sheet with adequate liquidity and minimal debt maturities.

 

However, the prolonged recession has led to increased tenant bankruptcies and a reduction in disposable income. In addition, Macerich has an active development pipeline, which increases operational risks in the current credit-constrained market. Consequently, we maintain our Neutral recommendation on the stock, which currently has a Zacks #3 Rank that translates into a short-term Hold rating.