Final Farewell: Reflecting on Nordstrom’s Exit from Canada [Podcast]

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Craig and Lee discuss the final exit of Nordstrom from Canada after almost 8 years, including the smashing of fixtures by staff in Vancouver during liquidation, challenges Nordstrom had in Canada, speculation on future of old Nordstrom locations and an American Nordstrom discussion.

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Transcript

Announcer 0:00
This is a Retail Insider Podcast. You’re listening to “The Weekly”.

Lee Rivett 0:08
Welcome to this week’s episode of “The Weekly” by Retail Insider. I’m Lee Rivett and I’m joined with the owner and publisher of Retail Insider Media, Craig Patterson, to discuss this week’s most read articles on retail-insider.com. So thanks for joining me, Craig.

Craig Patterson 0:22
Hello, everyone.

Lee Rivett 0:23
Now for this podcast, we wanted to do one final acknowledgement of Nordstrom as it took its final gasp of air in the Canadian marketplace over this last week. Now media has been flooding our news feeds with a range of opinions on the exit of Nordstrom as the chain unwound its 10 years of operations in Canada. Now, its death march began back in March 2023. As it announced it was going to shutter its Canadian operations. But then things got promptly ‘real’ as it pulled the plug on the website at that point. So next up was the seven “off price” are “discounted” stores called “Nordstrom Rack”, which shuttered in mid May, leaving the six full price stores, called simply “Nordstrom”, to hold liquidation sales to offload as much product before closing last week. So now we’ve crossed that finish line and the final remnants of Nordstrom – being these full price stores – have closed across Canada. So Craig, to recap, yes, it’s 10 years ago, and 2014 Where Calgary opened up the first full price store. And then it popped up in Vancouver, Toronto and Ottawa. So a lot of Canadians have seen and shopped at these stores. So now – 10 years later and it’s now shuttered – what’s your thoughts, Craig?

Craig Patterson 1:33
Well, goodness me. Yes, Nordstrom has officially vacated the Canadian market in terms of having stores. Last week, oh my goodness – I think it was in Daily Hive and probably other social media – there were some really startling videos of employees at Nordstrom smashing the heck out of fixtures. In the store. It was a bit of a farewell

Lee Rivett 1:55
Well, and for me, it just triggered like the Vancouver Riots back in the day around the Olympics. But yeah, the optics of that was not so great for me.

Craig Patterson 2:02
It seemed fitting and it was also really brutal to see.

Lee Rivett 2:05
Yeah. Like Sledgehammers.

Craig Patterson 2:07
Rather shocking. And it was just jarring. I put it on on the Retail Insider Instagram pages as a repost. And people were reacting with shocked comments and whatnot. And I agree. That’s why I posted it on there.

Lee Rivett 2:21
There’s a lot of context that people didn’t have. When you take a look at the Vancouver riot people just wanted to break stuff just to ‘break stuff’ or ‘steal stuff’. This was not the case for that. There is likely a reason or rationale as to why people were breaking things with sledgehammers.

Craig Patterson 2:36
Now, retailers, in some cases do have to actually destroy certain things just at the end of these sorts of situations.

Lee Rivett 2:42
Yeah, and we don’t have any internal memo from Nordstrom confirming the suspicion but it would make sense that you have branded fixtures and shelving – that they would have to be destroyed.

Craig Patterson 2:51
This has happened in the past. So when Disney had originally left Canada over a decade ago, and then left more recently during the pandemic as well – I don’t know about the second time in terms of things being destroyed in terms of fixtures and whatnot from the store as well as perhaps some product. Nevertheless, the just the optics of the people with sledgehammers bashing things to pieces in the store was just quite a shock.

Shuttered Nordstrom at CF Pacific Centre (Image: Lee Rivett)

Lee Rivett 3:16
When will you take a look at the downtown Vancouver “Nordstrom” full price store – it was a Sears Canada before. They spent a whole lot of time and effort to bring it up to the current “look and feel” of the full price Nordstrom. It was beautiful. So it was shocking to me to see sledgehammers going to a store like that because at the end of the day, it just was sad and kind of a waste.

Craig Patterson 3:38
So about 10 weeks ago, I posted a personal Instagram story as well. We had been at Yorkdale with JC Williams Group and I just I had this moment we walked through the Yorkdale Nordstrom store and I thought this is a nice looking store. It’s well built. It’s It looks beautiful. What an incredible waste. And I did put out a bit of a message that was slightly scathing. I just said Nordstrom was leaving Canada with its tail between its legs. And this is an embarrassment. I don’t think that Nordstrom put in a ‘full effort’ in Canada to be a great retailer. It put an ‘OK effort’, I think – the stores overall were pretty decent, but I think some were in the wrong locations. And I think that they didn’t bring the right brands in. And we know over the years as some of these brands have been secured by retailers such as Holt Renfrew and Hudson’s Bay. But nevertheless, what did Nordstrom have to offer to Canadian consumers that wasn’t already available in the market?

Lee Rivett 4:33
Yeah, and I think that you could get all the brands that were at Nordstrom at other locations.

Craig Patterson 4:37
And that’s a problem. If you think about if – I’ll call it a department store though I don’t know if Nordstrom could be technically called a department store – but at this point, we can go online and buy the same stuff. We can go to the brand stores that are individually say in the same mall and buy that stuff. Whether or not that’s Nike or whether or not that’s you know, Chanel cosmetics or whether or not that’s a pair of On running shoes. These are all things that we can get somewhere else within Nordstrom stores. Not many of the brands that were at Nordstrom were not available elsewhere.

Lee Rivett 5:10
And there’s exceptions to that too. Like Delvaux was a Belgian brand of like handbags and wallets inside of leather goods. They were in the Vancouver and Toronto full price Nordstroms as well. So now that they’ve all shuttered, I went into the Holt Renfrew in downtown Vancouver and was able to talk to their new concession that just opened up there.

Craig Patterson 5:32
And then I spoke to Jody Wolf, who I asked to run through Yorkdale as I didn’t have a chance to get up there on time, and Jodie said, there’s no Delvaux at Holt Renfrew there. So it looks like just Vancouver for now has it but remains to be seen. That was one of very few brands you could only get at Nordstrom in Canada, and I don’t know how well the brand was doing. So I think it probably would do better at Holt Renfrew anyways, because Holt Renfrew gets a wealthier shopper.

Lee Rivett 5:54
And that’s the feeling I got from the downtown Vancouver full fledged Nordstrom as well. But I’ve never been to the American Nordstrom stores. So how are they different from the Canadian variants?

Craig Patterson 6:04
I think Nordstrom was a little bit different than the American stores. I was in Las Vegas recently. I got to go to a Nordstrom store there. One thing I thought was interesting about the American’s Nordstrom stores is they seem to be dropping some designer brands. They don’t have as many as they had before. This was an issue in Canada as well. But the former creative director that had left Nordstrom, Jeffrey, who also had a store there he I think he had a lot of relationships with brands and now that there’s a new person that’s come in to replace him, I think they’re gonna start building some of those relationships again. So you’ll see some more designer brands.

Lee Rivett 6:34
And besides brands, how’s the overall company doing in the United States?

Craig Patterson 6:38
San Francisco market is finished for Nordstrom, which is a little bit shocking. They’ve announced that they’re going to be closing their downtown San Francisco store. Sales have absolutely tanked. It’s also tanked in the shopping center, with Westfield defaulting on its mortgage and handing over the keys to its lender to basically take over the operations of the Westfield, San Francisco shopping center. I don’t know how Bloomingdale’s feels about that. But this is quite a time for them. But anyways, that’s sort of a sidetrack here, but Nordstrom, the United States overall, is a pretty decent retailer. Not to say that the Canadian operations were bad, but I think they were a little bit different. I also miss having a piano player at Nordstrom, but that’s for older people that might remember this, being a part of the stores.

Closed Nordstrom at CF Toronto Eaton Centre (Image: Dustin Fuhs)

Lee Rivett 7:22
Now that Nordstrom, Canada has completed its exit, it’s done, everything is closed. What are you finding is the sentiment in the Canadian marketplace now that it’s closed?

Craig Patterson 7:33
I will say that I have spoken to some Nordstrom shoppers in Canada who are actually sad to see it go. Because they had sales associates that would put stuff aside for them and say, “This might fit you. This might look good on you.” and some Canadians had establish these relationships with some of these brands. That’s really too bad. I mean, they’re gonna have to find other places to shop.

Lee Rivett 7:52
And where do you think they’re going to do?

Craig Patterson 7:53
They’ll be able to do it. I mean, there’s brands out there, and maybe they’ll go online. There were brands in Nordstrom that have websites and also have standalone stores in Canada and are available in other retailers. So people will be able to find these brands. It’s going to happen, it’s just a matter of locating it, but it won’t be at Nordstrom anymore. And will people shop on the Nordstrom American website, and do you know customs over to Canada? I highly doubt it. Maybe a few but probably not that many, maybe some people from Vancouver will go down to the Seattle store to shop because they were doing that before Nordstrom entered the Canadian market anyways.

Lee Rivett 8:27
Now that Canadians are looking at Nordstrom Canada in our rearview mirrors, there was a lot of speculation on what the void of Nordstrom Canada would leave behind in the Canadian retail marketplace. So, in your opinion, there’s been quite a bit of time that Nordstrom Canada hasn’t really effectively been here, right, like liquidation sales doesn’t really count as fully operating in Canada. So are you seeing any early indicators on what the Canadian economy or retail environment is doing as a result of this departure?

Craig Patterson 9:01
We may see some headwinds for retail in Canada. And this would have probably hit Nordstrom before its closing. And I think it’s going to probably continue to hit retailers that are not catering to that top luxury market. If you look at where things have gone with inflation, and you look at where the cost of living has gone, just generally, you look at real estate prices whether or not a person is renting a home or looking to buy it with interest rates going up with rents going up with the cost of food going up a lot of consumers out there that may have been aspirational and we’re looking at buying certain goods – or even more expensive goods or even just mid price goods – have stopped shopping. And this is a huge concern for retail. I knew that our real estate prices were going to bite us in the ass eventually here in Canada because you look at a place like Texas where you can buy a home for a reasonable price and the salaries are actually pretty high and the taxes are not terrible on top of that to people that can afford to buy more stuff. So Americans generally have a better/higher buying power than Canadians. We look like a prosperous country. We have all kinds of great retail our malls are doing so much better overall than in the United States. And I think retail here is thriving. And It shocks me because Americans have more money. They say, “Well, yeah, Canadians like to buy things on sale and whatnot” I don’t think it’s because we’re more pragmatic. I think it’s because we have to because we’re broke. Because our housing is so damn expensive, and things have gotten so expensive. You go to Loblaws and what Dustin posted a photo of two bags of chips for $9. And they would have been a buck 99 Before the pandemic. I mean, we’re getting gouged. I don’t care what Sylvan Charlebois says, But, you know, these grocery stores are absolutely gouging us because I went to Whole Foods, and I paid three bucks less for a huge thing of iced coffee than I would have at Loblaws. So we are getting gouged at these stores. There’s no question there. I should probably do a separate podcast on this because it does piss me off a bit.

CF Sherway Gardens Nordstrom (Image: Nordstrom)

Lee Rivett 10:50
On what do you think is going to happen with these Nordstrom box stores? Like we talked about it before? But let’s have you had any more time to think about that?

Craig Patterson 10:57
That’s a good question. I mean, I don’t have a lot of insight or, or I don’t have a lot of insight into this right now other than what I think I did. I’ve done TV and radio discussing this for a few months now. But my expectation – and we even did a podcast on this – is that the Nordstrom Rack stores will probably be pretty easy to be picked up by retailers. The Young and Bloor locations probably going to go to some big brands that we all know. I’m not saying I know which one I’m just saying it’ll probably be a household name or something because they can afford the rent and it’s a big spot. So you might see a big something in there. That’s like a big Nike flagship store. And I’m totally just making that up. That is not in any way anything that I’ve even heard of being negotiated. So that’s why I’m saying it but look at a good place for a Nike flagship store by the way, if anybody’s there brokering that deal.

The other Nordstrom Rack stores, they’ve run between 30,000 and 40,000 square feet, typically here in Canada. They might go to a boutique grocery store, maybe a Sport Check might open it, that’s not going to be hard. It’s these bigger Nordstrom stores that are spanning anywhere from about 140,000 square feet to about 230,000 square feet. Those are gonna have to be filled. La Maison Simons may have an opportunity to go into some of these boxes. I don’t know if Simon’s has the money to do it, but you never know. In downtown these, these boxes could be split up. I’m thinking primarily Toronto and Vancouver, but it costs millions and millions of dollars to do that. In Vancouver at the CF Pacific Center, you’ve got a Nordstrom store. There’s fire stairs, there’s components to this old Eatons building, which are going to be quite challenging to have to repurpose if they want to turn this into a shopping mall. So we’ll see I don’t know what’s gonna happen there. But hey, I mean Cadillac, Fairview lost a lot of money with this Nordstrom situation here. Five of those six department stores were in Cadillac Fairview malls – one is an Oxford mall being Yorkdale. So Cadillac, Fairview of sure is going to want to somehow recoup as much as they can on this disaster of Norstrom leaving think that our landlords up here in Canada are generally in a better shape than what we’re seeing in the United States. Our real estate is more valuable typically in the cities here. We have less retail space per person. If this happened in the United States. I’d be more worried – if I was American doing this report.

Lee Rivett 12:05
Do you have anything to kind of wrap up and final thoughts here?

Craig Patterson 13:18
I also optimistic and I think that we’re going to see some interesting stuff happen in Canada over the next few years. I don’t think this is an end of the world situation. I think it’s a matter of adapting and doing something new. But it’ll be interesting to watch. So really, what we’ll do is we’ll keep our ear to the ground, see what we can hear. And eventually we’ll be reporting on what’s going to be replacing these Nordstrom stores. Be it the full sized ones as well as Nordstrom Rack so it’s going to be an interesting and exciting time to be reporting here at Retail Insider, as it always is.

Lee Rivett 13:46
Thank you very much for going through this with me. It’s again, it’s the farewell to Nordstrom pretty much so. But otherwise talk to you next week.

Craig Patterson 13:52
Thank you so much, Lee, and thank you so much everyone for listening. Take care and bye for now.

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Nordstrom Canada at CF Pacific Centre

Nordstrom Canada at CF Toronto Eaton Centre

3 COMMENTS

  1. It’ll be quite telling if Saks doesn’t take over the Vancouver and Yorkdale locations. Only cosmetic updates would be required as the big bucks have been spent by Nordstrom and Cadillac Fairview to open up and modernize those spaces.

  2. Great little discussion. I’ll miss Nordstrom (Calgary). I’d shop there sometimes for myself, but mostly for gifts for my wife. The benefit of a dept store over individual stores is it saves me time! I can walk in, look at a variety of brands, and get her something quick. Also, when I’d go with her or my teenage son to Chinook I’d often go to their E-bar for coffee (less busy, and I preferred to Starbucks). With seating out front, it actually gave some life to that end of the mall. I was in there last week, and that side of Chinook is dead (doesn’t help Birks among others have pulled out at that end of the mall). I know there was talk that only the Vancouver store made money, but I’d love to see hard evidence. The Chinook store always had traffic, and was never dead. I’ve been to several in the US (including probably the smallest I’ve seen in Spokane) and I find it hard to believe it did that poorly. The other topic though that I’d be curious to know more about is Saks – how is that surviving??? It seems always closed when I walk by.

  3. MM.
    I will miss the level of service..the shopping experience was a pleasure again. The sales associates were helpful, polite AND you could find them when needed/ they would offer help (hello The Bay!) . The civilized layout of the stores…places to sit outside the change rooms , offers of free samples or try-out of new product when buying in the beauty dept. Free shipping and ease of returns when ordering online.I hate what Holt Renfrew did to Ogilvys…plus eliminating brands not available anymore in Montreal and foremost, Holt Renfrew is soulless and boring in its rectitude….

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