Nordstrom closed all of its Canadian stores, cutting 2,500 jobs

6 min read

“We do not see a realistic path to profitability for the Canadian business,” said the CEO

Article content

TORONTO — Nordstrom Inc. is closing all of its Canadian stores and cutting 2,500 jobs as it winds down operations in the country.

Advertisements 2

Article content

The Seattle-based retailer has six Nordstrom and seven Nordstrom Rack stores in Canada, which it announced Thursday will be shuttered by late June. Its e-commerce business, nordstrom.ca, was due to cease operations by the end of the day.

Article content

Chief executive Erik Nordstrom said the closures were the result of regular reviews the company conducts that challenged its longtime plans “to build and sustain a long-term business” in Canada.

“Despite our best efforts, we do not see a realistic path to profitability for the Canadian business,” he said in a statement.

“This decision will simplify our structure, intensify focus on our growth and profitability goals and position us to create greater value for our shareholders.”

Article content

Advertisements 3

Article content

Nordstrom, an upscale department store chain that sold a mix of designer goods, first announced plans to expand to Canada in 2012 and opened its first store in Calgary at CF Chinook Center in September 2014.

It quickly expanded its presence with stores at CF Rideau Center in Ottawa, CF Pacific Center in Vancouver and CF Eaton Centre, Yorkdale Shopping Center and CF Sherway Gardens in Toronto.

Nordstrom Rack, which promised luxury brands at bargain prices, followed with several locations. When it opened its first Rack store in Canada in 2018 at Vaughan Mills, a mall north of Toronto, it said as many as 15 more could follow.

The company said its Rack stores would deliver savings of up to 70 per cent on apparel, accessories, home, beauty and travel items from 38 of the top 50 brands already sold in its Canadian department stores.

Advertisements 4

Article content

The Canadian closures were “probably the right choice” and showed the company had a lack of confidence in how it could continue to support Canadian losses, said Neil Saunders, the managing director of GlobalData, a retail research agency.

“Although the division is relatively small, and the Canadian market has somewhat limited potential because of its size, it is nevertheless a significant admission of failure that Nordstrom cannot make its proposition work financially,” he wrote in a note to investors.

“It also underlines the rather tenuous position of the company which wants to focus is finances and firepower on reinvigorating the US operation.”

Nordstrom’s wind down is being completed through an order obtained by the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act.

Advertisements 5

Article content

It intends to seek court approval later this month for a liquidation sale, which would begin shortly after.

Nordstrom Canada gift cards will continue to be honored until the end of the liquidation period, although none will be made available for purchase after Thursday.

Returns and exchanges will be permitted until March 17 at which point all sales and returns will be considered final.

The Canadian wind-down came as Nordstrom released its fourth quarter results, which included net earnings of US$119 million in the period ended Jan. 28. That is compared with net earnings of US$200 million during the same period the year before.

As a result of the Canadian closures, Nordstrom is expected to record US$300 to US$350 million in pre-tax charges in the first quarter of fiscal 2023.

The wind-down is expected to result in a roughly US$400 million decline in net sales.

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourages all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Join the Conversation

You May Also Like

More From Author

+ There are no comments

Add yours