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Canuck retailers watch out: Nordstrom sees up to nine full-line stores and 15 Rack outlets throughout Canada.
This story first appeared in the September 14, 2012 issue of WWD. Subscribe Today.
“At this early date, we are talking about six to eight, maybe nine, full-line stores and 12 to 15 Racks,” Nordstrom Inc. president Blake Nordstrom told WWD Thursday.
Regarding international ambitions beyond Canada, Nordstrom replied: “It’s way too premature without yet being in the number-one location in the world — Manhattan — and not yet having Canada under our belt. At this point, we haven’t spent any time or energy” investigating overseas opportunities.
It’s something the company might save for 2020, after Nordstrom’s opening on 57th Street in Manhattan, which has been set for 2018, he said. The Seattle-based Nordstrom, with 117 full-line stores in the U.S., still has “a handful of opportunities” to add full-line domestic units. However, “it’s more about making those existing locations more productive and taking a synergistic, multichannel approach,” Nordstrom said.
Earlier, he disclosed at a press conference in Toronto that Nordstrom will make its debut in Canada in fall 2014 with a 140,000-square-foot, two-level unit in the Chinook Centre in Calgary, which will be followed by three other full-line locations in Canada. All four are happening through a partnership with Cadillac Fairview Corp. Ltd., one of North America’s leading developers.
After Calgary, a two-level, 157,000-square-foot Nordstrom will open in Ottawa’s Rideau Centre, and a three-level, 228,000-square-foot site in Vancouver’s Pacific Centre, both in spring 2015. The fourth Nordstrom in Canada will be a two-level, 138,000-square-foot store site in Sherway Gardens on the west end of Toronto in fall 2016.
Nordstrom also wants to open in the heart of Toronto but cited limited downtown venues. “We are open and willing to listen to any and all alternatives,” he said. Sherway Gardens will be expanded to provide a brand-new site for Nordstrom. In the other three locations, Nordstrom will convert Sears sites. Rideau Centre will also be expanded.
“It’s a big expense and a big step for us to go to Canada,” Nordstrom added, necessitating building “a foundation” of stores at the outset. “Normally, we would open with one store and get the reception of customers and go from there. For a number of reasons, it wasn’t economically feasible to open just one.”
“This is an exciting milestone in the Canadian retail marketplace, which is undergoing considerable evolution,” said Wayne Barwise, executive vice president of development for Cadillac Fairview, which has been instrumental in bringing several retailers to Canada including Apple, Zara and H&M, and has a portfolio of 83 properties tracking at $750 in sales per square foot this year. “It’s a total of 665,000 square feet for the four Nordstrom stores,” Barwise said. “That’s the equivalent of 15 acres or eight Canadian football fields, including the end zones. This is the culmination of many years of work to find space in strategic locations.”
Karen McKibbin, a 27-year veteran of Nordstrom who started in the stockroom, has been named president of Nordstrom Canada. McKibbin, who was most recently vice president and regional manager of Northern California and Hawaii, will be based in Toronto and establish a team there. Nordstrom is seeking a third party to handle Canadian distribution.
“It’s pretty evident your economy has been stronger and more robust, and as of late, there have been a lot of people looking and announcements of U.S. retailers coming here,” Nordstrom said. “But there are cultural differences, nuances. We recognize there are differences, which is probably why we were slow to come to Canada.”
J. Crew, Ann Taylor, Loft and Limited Brands are also just now expanding in Canada, where the economy is holding up better than the U.S. economy. There is also 50 percent less retail square footage per capita in Canada.
According to a survey by WSL/Strategic Retail called “How Canada Shops,” 64 percent of Canadians can still afford to shop beyond the basics — versus half of Americans who say they cannot. WSL also found that Canadians expect everyday low prices and will use coupons when available but don’t crave them as much as U.S. shoppers: 55 percent of Canadian women and 68 percent of Americans regularly use coupons. In other findings on women shoppers: 50 percent of Canadians search the Internet for promotions versus 61 percent of Americans; 57 percent of Canadians pick up circulars in store versus 71 percent of Americans; 50 percent of Canadians say they shop online, versus 75 percent of Americans; 31 percent of Canadians visit retail and manufacturer Web sites versus 50 percent of Americans, and 26 percent of Canadians can download apps to mobile phones compared to nearly half of Americans.
“As U.S. companies struggle with sales and profit growth in a stalled global economy, and as the Internet continues to steal share of shoppers from the stores, the opportunity to expand into Canada has become very appealing,” said Wendy Liebmann, chief executive officer of WSL/Strategic Retail. She said Canadians are as cautious as Americans about spending, but less passionate and less frequently on the Internet. The bottom line: Cultural differences mean U.S. retailers must tailor their strategies in Canada. The study was conducted online from May 3 to 14 of 3,095 adults ages 18 to 70 with household incomes of at least $15,000.