Want a $500 Donna Karen handbag for 60 bucks? A $650 Gucci watch for $4.97? Put on your body armor and head for Last Chance, the nation's only Nordstrom clearance store, where aggression, obsession and shopping addiction are on daily display.

The cornflower-blue, kid-leather Donna Karan handbag dangles from her fingers.
"I don't want it. I don't need it. I don't even particularly like it," she says. "But it's Donna Karan--not just DKNY, but Donna Karan--and it's perfect."

She turns to her girlfriend--who stands mutely, draped in four designer scarves and a 100 percent camel-hair overcoat at least two sizes too big--and asks, "What am I going to do?"

The answer floats across the store aisle from a dark-haired shopper pushing a cart loaded with blouses: "Buy it."

Ultimately, though, she passes on Donna Karan, finding, instead, a pair of suede Stuart Weitzman loafers ($29.99) and a leather Ralph Lauren wallet ($9.97).

This is the Impossible Dream of shopping. This is Last Chance Bargain Shoes and Apparel, a grungy basement at Phoenix's Camelback Colonnade where, every day, 62 Nordstrom department stores and 20 other Nordstrom venues from around the country ship merchandise their patrons have returned so it can be resold at phenomenally, amazingly, unbelievably low prices.

Like $89.99 for an $8,500 full-length mink. Or $19.97 for a $600 Nicole Miller ball gown. Or $4.97 for a $650 Gucci watch.

At Last Chance, nothing is more than $100, but the store is hardly a Blue Light special. Part yard sale, part designer boutique, part coffee klatsch, Last Chance is unique in our consumer culture. Indeed, it has its own culture--its own rules, its own vernacular, its own stormy tales of betrayal and obsession and greed--fueled by Nordstrom's magnanimous return policy and rooted in an overwhelming desire.

The desire--no, the urge--no, the need--to possess.

John W. Nordstrom migrated from Sweden to the United States at the age of 16, with $5. He traveled west, eventually to Alaska, where he made $13,000 in the 1897 Klondike gold rush.

With that, he opened a shoe store in Seattle in 1901. John's three sons--Elmer, Everett and Lloyd--turned that one store into a successful chain of retail shoe outlets. The third and fourth generations of the Nordstrom family expanded the shoe business into a national chain of high-end department stores.

The name Nordstrom has become synonymous with customer service. The so-called urban legend regarding Nordstrom's liberal return policy--that the apparel store once took a car tire back from a customer--is actually true. Nordstrom had acquired a store that once sold tires and gave the woman back her money, even though tires were no longer sold there.

An entire book has been written on the subject of Nordstrom's famed service--The Nordstrom Way: The Inside Story of America's #1 Customer Service Company, published in 1995. The authors tell the tale of a customer who fell in love with a pair of Donna Karan pants, which happened to be on sale at the Nordstrom store she was shopping. Her size was not available. The clerk called other Nordstroms, and after failing to locate the pants in the proper size, took petty cash to a nearby department store--a competitor--purchased the pants at full price and sold them to the Nordstrom customer.

At Nordstrom's sale price.
There's an ongoing debate in the retail industry: Does fabulous customer service pay for itself, or does it cost the company more money?

Saul Yaari, a retail analyst with Piper Jaffray in Minneapolis, suggests that Nordstrom's liberal return policy could be affecting profits at the $4.1 billion firm, at least a bit. Other analysts contend that the chain's hallmark customer service more than pays for itself over the long run.

Whether profitable or costly, Nordstrom's customer-pleasing policies produce a continuous deluge of returns that is never resold at the department stores. Even the Nordstrom outlet chain--the Rack--refuses to sell merchandise customers have traded in.

The returns from these 80-plus venues go to the one and only Last Chance. A stroll through the Phoenix basement-bargain showplace tells you just how liberal Nordstrom's return policy is.

First comes the stench of old shoes. Then the stained, snagged ball gowns, the broken purse straps, the ripped coat linings.

But a bit of searching reveals a few items that could pass for brand-new. And some of those items bear elite brand names and absurdly low prices.

At Nordstrom, shoppers can return almost anything, no questions asked.
At Last Chance, all sales are final.
But that doesn't keep hundreds--sometimes thousands--of people from flocking to the clearance store every day, starting very early every morning.

The metal, gratelike gates of Last Chance don't rise until 9:30 a.m., but on a typical day, anywhere from 75 to 250 people will have gathered outside the entrance before then to gossip, read the paper, drink coffee and wait for The Opening.

The chatter dims at 9:25. On a Tuesday in mid-January, a squat man in blue emerges from the bowels of the store, untangles the cord on a karaoke machine by the cash register and clears his throat.

"Hello--can you hear me over there? Over there in the back--with the sunglasses on your head--can you hear me? Okay. First, I want to say good morning. Basically, the big rule here at Last Chance--because it is a competitive shopping environment, as we say--the big rule in the morning, no running. And no fast walking. That will be considered running. . . . You will be asked to leave. So, have a good time. There is a lot of merchandise--you really don't have to fight over it.

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