Craig sits down with Grace Yan, Commercial Consultant at Blackstone Commercial, to discuss the departure of Nordstrom store in CF Chinook Centre in Calgary. Yan says that times are tough in the Calgary market, and that there are opportunities to do something interesting with Nordstrom’s 140,000 square foot Calgary space after the retailer exits Canada this summer.
The Interview Series video podcasts by Retail Insider Canada are available through our Retail Insider YouTube Channel where you can subscribe and be notified when new video episodes are available.
If you prefer to listen to the audio version, it is available below:
The Interview Series audio podcasts by Retail Insider Canada are available on Apple Podcasts, Stitcher, TuneIn, Google Play, or through our dedicated RSS feed for Overcast and other podcast players. Also check out our The Weekly audio podcast where Craig and Lee discuss popular content published on Retail Insider which is part of the The Retail Insider Podcast Network.
- Grace Yan, Commercial Consultant at Blackstone Commercial
Transcription
Craig Patterson
I’m Craig Patterson. I’m the founder and publisher and CEO of Retail Insider. We’re talking about Nordstrom today, specifically in the Calgary market. Nordstrom announced that it’s going to be leaving the Canadian market and that’s affecting all kinds of different cities, including Calgary, which has a Nordstrom store at CF Chinook Centre. This is Grace Yan. She’s a broker with Blackstone Commercial, and a community advocate. You also ran for mayor, Grace, a little while ago in Calgary.
Grace Yan
I did. Yes. And thanks for having me, Craig.
Craig Patterson
Now, are you surprised with the closure of Nordstrom in Canada?
Grace Yan
Well, I was and I wasn’t. I mean, I’m at Chinook all the time. I’ve seen Nordstrom and other stores that aren’t busy. Saks isn’t busy. Saks is even closed for the day. So I wasn’t really surprised. And sometimes, and lately, the past little while going into Nordstroms they haven’t been restocking. So it then you’re wondering, well, there’s just nothing. It’s just been bare lately. So yeah, I think wasn’t a surprise, but you’re just hoping that they sort of figure something out to stay because, it was exciting when they came to Calgary.
Craig Patterson
I wonder if that restocking issue had anything to do with the fact that Nordstrom was already thinking about leaving Canada, I wonder?
Grace Yan
Well, I think you know, when you do your decision making around, sort of the future of the stores, you have to look at when you’re restocking, or even hiring, and that’s what it takes and have to plan well in advance. And so, you know, you kind of saw the writing on the wall. Which is sad because even the cafe there, it’s not busy either. And so, you know, with Nordstrom is leaving, and which is a huge anchor for Chinook Centre. With CF Chinook Centre and CF Market Mall, being one of our “Class A” shopping malls, they are just not busy. You there’s so many closures in those malls. You just see that all of a sudden the store is gone. And you don’t see anything else that’s coming in. And so it it’s a perception to people that “Oh, no. Another store closed?”.
Craig Patterson
And that’s in a mall that’s actually quite busy. I visited CF Chinook Centre, I think it was in October. And I’m always blown away with the foot traffic that’s coming through there particularly around the Louis Vuitton store where it’s just like a hoard of people that always seems to be coming by towards the Apple store.
Grace Yan
Yeah, the Apple Stores always usually busy. As of January, the traffic has slowed. You’ve seen more stores close. All you just see as these stores closing, and now Nordstrom is closing. We’re told that Alberta’s in a boom but when you see stores like this closing and like Bed Bath and Beyond closing 160 stores, Walmart’s closing I think two locations in Alberta. So there’s going to be a shift and I think we need to really repurpose these malls. They do this in Toronto, they do this in different parts of the world, where there’s the main floor commercial and then they build up condos and there’s a built in clientele. Like a Lifestyle Center.
Craig Patterson
What do you think is going to happen? What do you think is going to happen to this Nordstrom box at CF Chinook Centre? Do you think they’re going to extend the mall? Do you think they can find one tenant? Or do you think that they’re going to split it up into a bunch of smaller retailers?
Grace Yan
I think they’re going to have to demise it. I know that Zellers is coming back in, but within Hudson’s Bay locations. Some people are saying why are they going to put a dollar store there now? We’re seeing more and more lower end, retail stores popping up.
Craig Patterson
How do you think that the closure of Nordstrom and CF Chinook Centre is going to impact other retailers as well as say, even perhaps some commercial real estate deals? The reason I asked this question is because I was told recently, in a major city that there was some negotiations for some commercial real estate space, the moment that the announcement was made about Nordstrom, brokers called and said, “Hold on, we need to figure out what’s going to happen with these Nordstrom boxes, because we don’t know what the foot traffic is going to be like”. What do you think it’s going to be like at CF Chinook Centre, as Nordstrom closes in the foot traffic changes?
Grace Yan
Of course, Nordstrom has a draw of people. With them leaving, it’s going to impact the traffic. And so other potential tenants are going to be rethinking, because if they’re not going to have the same foot traffic and see if can guarantee same foot traffic, and that’s going to affect everyone’s sales overall. It’s been a challenge to foot traffic anyways, since COVID. A lot of the box-mortar type retail stores are really struggling to get back to where they were pre-COVID. Because that was two years of people adjusting to online, and they were forced to adjust online. So now that people are used to this, so I’m just at home and I’m just ordering everything. It’s convenient. You don’t have to find parking. So I think that’s why these malls (in general), have to repurpose to attract people to be there. And that maybe means you have to build up and build condos on top of it. Where there’s restaurants, you know, grocery stores, gyms, cafes, bakeries, it’s all it’s all there. And I think that would really attract a different model that most North American malls don’t have. But other malls in the world are set up like that.
Craig Patterson
Now, you mentioned foot traffic. You also mentioned that the Saks Fifth Avenue store in the mall – knows for those that are not aware, there’s three anchors, there’s a Hudson’s Bay store, there’s a Nordstrom store that’s going to be closing in due course, and there’s a Saks Fifth Avenue. Now the Saks Fifth Avenue has been quite quiet. If Saks Fifth Avenue was to shut down at CF Chinook Centre and Calgary, what do you think could happen there? Because that would be quite catastrophic for one mall to lose two relatively high end anchors.
Grace Yan
I mean, it’s a disaster already that Nordstrom is leaving. If Saks was to leave, and, again, I see Saks randomly closing, sometimes it’s open, sometimes it’s not. And sometimes they’re closed early. The hours are so random, that I know that some of these stores are saying we’d rather take the fine of closing than having to open and pay the costs to staff it for the day. You know, and I think the bigger picture, though, Craig, is that we wouldn’t have to worry about all of this if the economy overall was in better shape. If if we had instead of all these companies leaving Canada, if we had them coming, and we’re employing people, which means giving them incentives. For the first five years of being here, you want to attract businesses to come to Canada. And I think the question is that we have to think about why are they leaving? Why are they losing money? Canada is a great country, and a lot of positives of setting up a business in Canada. But when we’re losing Bed Bath and Beyond and Abercrombie and Fitch and all these companies that have left, the list is endless that are leaving Canada. And so I think, as a country, we have to think, Well, why? Why are they leaving? Why aren’t they making money? We know the numbers. We know the losses. We know what the problems are, we have to offer solutions. I think we have to talk more about the solutions of keeping and retaining, excellent companies like Nordstroms. I would be sitting down with Nordstroms and saying, This is a disaster. What can we do even on the government side or on the landlord side, we all have to work together and make sure we don’t really lose companies like this.
Craig Patterson
Now, yeah, let’s talk a little bit about retailing Calgary, generally now, obviously, CF Chinook Centre, which is not downtown for those that may not know the Calgary area very well. What are you seeing downtown because of downtown Calgary, there are also three retailers. There is a Hudson’s Bay store, which has been downsized. There’s a La Maison Simons store, which is quite large, I think, 92,000 square feet if I remember the article that I wrote, and there’s a Holt Renfrew store, which recently just renewed its lease. What if you seen anything in downtown Calgary in terms of retail, as well as say, the dominance of Holt Renfrew in the market at the higher end?
Grace Yan
Yeah, I think the only way we’re going to retain a lot of these businesses, especially downtown because our downtown is still 70% vacant. Okay, we’re seeing more and more people get back to work. But there’s still a lot of the head offices that have left Calgary, so we still have hundreds and 1000s of square feet vacant. And the only way we’re going to retain businesses downtown is rent adjustments. I get it, it needs to work for the landlords as well. But that’s the only way we’re going to retain businesses and even attract them. I represent franchisors that expand globally, and across Canada. And it’s always, calculating, of course, labor costs and, and lease rates, that’s a huge, huge impact on decisions of where you’re going to be either in Canada or elsewhere in the world, like lease rates in the US, I mean, way, way more attractive, and margins are way better in the States. And leasing is a lot easier, as well. And, overall, I think we need to make the whole process of leasing in our only lease rates, but just the time it takes, it’s it’s gets to be too lengthy of a process even for companies to even want to expand. So there’s many, many challenges. But I think we wouldn’t be even talking about these issues if people had money to spend. And, we were bringing companies here, rather than talking about them leaving.
Craig Patterson
Do you think that one of the big either Asian or European department stores might look at coming into the Canadian market? I know that Galleries Lafayette from France intended to come into with Montreal and possibly Toronto markets before the pandemic, but that never happened. You’ve obviously got some incredible stores that are in places like say, Seoul, you’ve got Lotte you’ve got Shinsegae — do you think any of these retailers might look to come into the Canadian market? Or do you think that we’re too small and not wealthy enough?
Grace Yan
I hear that a lot. Okay, when I work globally, and a lot of these companies do say that Canada is not a big enough market. You know, I think our population is the same population as California. So for them to really consider Canada as an expansion, then we really have to have something that would benefit them, whether it’s lease rates or certain concessions, tax incentives. Because there’s a you’re right, like, I mean, in Asia, they’re fine with the sheer population, you know, Asia, Europe and US. They’ve got the population to sustain their models. Canada doesn’t have the population, nor do we have the tax incentives. So, this is what we have to think about, yes, we want those companies coming internationally, okay, we really do. And so that’s why we have to learn to work with the rest of the world. And we’re the only country in the world that has to have everything in two languages. For a model for a company, that’s a big decision, because that’s an extra cost, extra approvals by the government and all the products. And so these are all things that companies are saying, forget it. This is, you know, let’s just, let’s just go where it’s easy, and it’s comfortable, and our margins are better.
Craig Patterson
What do you think’s gonna happen with the Nordstrom space at CF Chinook Centre over the next couple of years?
Grace Yan
I hope it doesn’t stay vacant. Because that would just be horrendous. Is it’s looking sad as it is, okay. Chinook mall and Market Mall. Being the best malls in the city. I compare it to other places where we, you know, we want to be a world class city. But it looks old and tired. And it just looks sad. Especially when you see that there’s nobody there and it’s not it’s not vibrant, you don’t get that vibrant, feeling like, you know, things are happening and things are growing. And here now we’re seeing Chinook losing Nordstroms and it’s gonna be more sad. They’ll probably have to demise it. And they seem to be putting in I said lower and type retail, you know, like, which is great, as long as it’s filled, I think. And it drives people there that’s what we really need.
Craig Patterson
Makes a lot of sense. Makes a lot of sense. We’ll wrap it up here. Grace. This is Grace Yan, your broker with Blackstone Commercial, community advocate, former mayoral candidate. You’ve also got the Philippine Chamber of Commerce in Calgary?
Grace Yan
Yes, yes. I am the President of the Philippine Chamber of Commerce and that’s what we’re trying to do, Craig is, is attract businesses, from the Philippines to Canada. So we’ve got some brands already that are coming in, that are here trying to expand as well. And it is it’s it’s a challenge, but I always think let’s just focus on the solution, because there is a solution to this. And we can grow and companies like Nordstroms shouldn’t have to leave. And we don’t want them to leave. We don’t want Nordstroms to leave, we don’t want Saks to leave, or Bed Bath and Beyond. Because then now we have less and less selection and then people are now going to order from Amazon. We we have less options now. Which is not good for the consumer.
Craig Patterson
Landlords or anyone doing deals in terms of retail.
Grace Yan
Yeah, yeah. So I think let’s focus on the solutions and get these companies not leaving.
Craig Patterson
Oh, absolutely. Thank you so much for joining us, Grace. And I’m Craig Patterson. I’m the founder, CEO and publisher of Retail Insider Media Ltd. This is the Retail Insider video series. We’re going to be talking more about Nordstrom and its spaces, what can be done, what went wrong, these conversations are going to be here and I think we’re going to be seeing some more announcements coming down here in Canada. So thank you so much again, everyone for joining us today. Take care and bye for now.
Subscribe, Rate, and Review our Retail Insider Podcast!
Follow Craig:
- LinkedIn: www.linkedin.com/in/CraigPattersonToronto
- Instagram: @craig_patterson_toronto
- Twitter: @RI_EIC
Follow Retail Insider:
- LinkedIn: www.linkedin.com/company/Retail-Insider
- Facebook: https://www.facebook.com/RetailInsider/
- Twitter: @RetailInsider_
- Instagram: @Retail_Insider_Canada
Listen & Subscribe:
Share your thoughts!
Drop us a line at Craig@Retail-Insider.com. You can also rate us in Apple Podcasts or recommend us in Overcast to help more people discover the show!
Background Music Credit: Hard Boiled Kevin MacLeod (incompetech.com). Licensed under Creative Commons: By Attribution 3.0 License. http://creativecommons.org/licenses/by/3.0/
