Nordstrom To Exit Canada And Shut All Stores
Seattle-based Nordstrom announced that it will be exiting its Canadian operations, including its six full-priced Nordstrom stores as well as its seven off-price Nordstrom Rack locations. Nordstrom’s first store in Canada opened in 2014 and its first Rack location opened in 2018.
“We took decisive actions to right-size our inventory as we entered the new year, positioning us for greater agility amidst continuing macroeconomic uncertainty. We also made the difficult decision to wind down operations in our Canadian business. This will enable us to simplify our operations and further increase our focus on driving long-term profitable growth in our core U.S. business,” said Erik Nordstrom, chief executive officer of Nordstrom, Inc. “As we enter fiscal 2023, we are focused on enhancing the customer experience, improving Nordstrom Rack performance, increasing inventory productivity and continuing to advance our supply chain optimization initiatives. We remain confident in the strength of our brands and our ability to drive profitable growth and deliver long-term value to our shareholders.”
Nordstrom’s first Canadian store opened in September of 2014 at CF Chinook Centre in Calgary. The 140,000 square foot store kicked off a multi-year expansion that saw other full-priced stores open in major Canadian cities. That included the March 2015 opening of the 157,000 square foot Nordstrom store at CF Rideau Centre in downtown Ottawa, the September 2015 opening of a 230,000 square foot flagship at CF Pacific Centre in downtown Vancouver, The September 2016 opening of a 220,000 square foot flagship at CF Toronto Eaton Centre in downtown Toronto, the October 2016 opening of a 200,000 square foot store at Yorkdale in Toronto, and the September 2017 of a 140,000 square foot location at CF Sherway Gardens in Toronto.
Nordstrom Rack opened its first Canadian store in March of 2018 at Vaughan Mills near Toronto. Nordstrom Rack stores subsequently opened at Deerfoot Meadows in Calgary, at Yonge and Bloor in downtown Toronto, at Ottawa Train Yards in Ottawa, South Edmonton Common in Edmonton, Heartland Town Centre in Mississauga, and most recently at the Willowbrook Shopping Centre in Langley near Vancouver in September of 2020. The store count for Nordstrom Rack in Canada sits at seven units, and the retailer said in years past that it planned to operate between 12 and 15 Rack stores in Canada.Nordstrom Rack stores are typically in the 30-40,000 square foot range.
Before the pandemic, there were signs that Nordstrom was struggling in Canada. Retail Insider was provided sales numbers for Nordstrom’s Canadian stores in 2019 and it was becoming apparent that there were challenges. While the Vancouver store’s sales were strong in the $300 million range annually, the other five stores failed to meet targets — although the CF Toronto Eaton Centre locations was said to be selling in excess of $100 million annually, which wasn’t bad. Still, things didn’t look good when most of the luxury brands exited Nordstrom’s Toronto stores — at CF Toronto Eaton Centre, almost all of the luxury brand bag/accessory shop-in-stores on the main floor shuttered during the pandemic, as did almost all of the luxury women’s boutiques on the third floor. At Toronto’s Yorkdale, Nordstrom has maintained most of the luxury brand shops for bags on its main floor, though almost all of the luxury shops for women’s ready-to-wear had shut before the end of 2022. Brokers in the know had commented on how the neighbouring Canada Goose store at Yorkdale was doing higher sales than the much larger Nordstrom location in the mall.
A recent visit to the Vancouver Nordstrom store showed a well-stocked flagship with a substantial amount of luxury offerings for women and men, as well as a robust offering of luxury brand bags and footwear. The Vancouver store is the only Nordstrom in Canada to see such an expansive assortment of brands and it’s also one of the most luxury-heavy in the chain, and has been said to be the company’s top-selling store in recent years.
At the same time, sources told Retail Insider that some high-spending Chinese shoppers had moved on to other places, impacting luxury sales at Nordstrom in downtown Vancouver as well as other retailers in the area.
Nordstrom’s exit from Canada could partly be due to a Canadian connection. Montreal-based Ryan Cohen, who is also Chairman of GameStop, recently bought a substantial number of shares in Nordstrom, giving him the opportunity to shake up the retailer’s board. And besides making changes to the board, Cohen was said to be supporting cost-cutting as Nordstrom’s market cap declines.
It’s not known if Cohen’s influence led to Nordstrom’s decision to exit its Canadian operations, though he noted challenges to Nordstrom over the December 2022 holidays which included price markdowns, an inventory glut, and lacklustre sales. News of his share purchase sent Nordstrom shares soaring in early February.
