We went to Nordstrom's discount store and saw how it could be the future of the chain (JWN)

Business Insider/Mary Hanbury

• Nordstrom's sales grew in the fourth quarter, mostly thanks to its off-price chain, Nordstrom Rack.
• The company said it would be opening 12 new Nordstrom Rack stores this year in addition to one new Nordstrom store. Nordstrom Rack stores now outnumber the company's full-price stores in the US.
• We visited a Nordstrom Rack store in New York City to see what the shopping experience is like.

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Nordstrom is turning into a discount retailer to boost sales. 

The century-old department store reported a 2.6% increase in same-store sales during the fourth quarter on Thursday. This was mostly thanks to strong sales at its off-price chain, Nordstrom Rack. 

Same-store sales at Nordstrom Rack grew 3.7% overall, and its net sales were up 15%. This was driven by growth online, which was up by 23.7% in the quarter. Nordstrom's full-price stores, meanwhile, reported a 1.7% decrease in same-store sales and a 12.4% increase online. 

Nordstrom has struggled recently. Same-store sales numbers have steadily declined in its full-line stores since 2014. It has increasingly leaned on Nordstrom Rack, for growth, and these off-price stores now outnumber Nordstrom's full-price locations.

The retailer announced in its earnings release that it would be opening 12 new Nordstrom Rack stores in 2018, and only one new Nordstrom. 

We went to a Nordstrom Rack store last June to see if this truly is the future of the Nordstrom brand:

Nordstrom Rack is the off-price retail division of the luxury department store Nordstrom. It sells brands for between 30% and 70% off. We visited one of its stores in New York's Union Square on a sunny afternoon in June 2017. The store is one block away from a rival off-price retailer, Burlington.

Business Insider/Mary Hanbury

While same-store sales in Nordstrom's department stores have slowed in the past three years, the off-price channel has seen more growth, especially online.

Business Insider/Mary Hanbury

For this reason, the brand has been growing its off-price store locations: Nordstrom now operates 232 off-price stores in the US and 122 full-line stores. The retailer confirmed it will be opening 12 more Nordstrom Rack stores in 2018.

Business Insider/Mary Hanbury

See the rest of the story at Business Insider

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