TORONTO – High-end U.S. retailer Nordstrom formally announced its plans Thursday to open Canadian stores – but does this mean trouble for Canadian retailers?
Nordstrom will open stores in four of Canada’s major shopping malls in fall 2014 including Calgary’s Chinook Centre, Vancouver’s Pacific Centre and the Rideau Centre in Ottawa. The malls are all operated by Cadillac Fairview, and Nordstrom will replace the Sears Canada stores set to close this fall. A new store will be built at Toronto’s Sherway Gardens.
Marketing expert David Finch considers Nordstrom just the latest in a series of stores redefining the Canadian retail market, and bringing competition for “home-grown” shopping destinations like the Bay.
“Nordstrom specifically will have the greatest impact on luxury retailers such Holt Renfrew or Harry Rosen. However, the luxury retail market in Canada has significant room for expansion when you compare it to the U.S. market,” says Finch, professor of marketing at the Bissett School of Business at Mount Royal University.
Good news for consumers
York University’s Schulich School of Business assistant marketing professor Alan Middleton says the 2008-2009 recession may start to affect the luxury goods market starting now, but believes the introduction of Nordstrom will be good news for Canadian consumer.
He adds that Nordstrom’s expansion into Canada has been expected for a while, and has thus given Canadian stores time to prepare. Middleton credits Bonnie Brooks, president of Hudson’s Bay Company, with doing a very good job of turning around the Bay culture.
“Sears? Troubled, needs help,” says Middleton. “Target doesn’t really get here until next year, Nordstrom really won’t get here significantly til next year or the year after, so they have time to do something about this.”
Middleton says that Nordstrom’s pending arrival in Canada is not as “traumatic” as the death of the Canadian retailer, but notes that Canadian-owned stores will definitely need to make changes.
“The whole value of an open market is they will have to improve,” he says. “Twenty years ago, Holt’s was a total write-off and they brought in a new manager (who has long since left) but he really turned Holt’s around. And there’s a great example of a high-ish end department store that really got going.”
Canada’s international appeal
The official announcement of Nordstrom’s arrival in Canada follows a consistently steady stream of U.S. and international chains that have been flocking to the country in recent years.
British fashion brand Ted Baker London and U.S.-based Kate Spade New York, along with women’s wear brands Ann Taylor and Loft will make their entry into the Canadian marketplace this fall. And U.S. discount giant Target Corp. is slated to set up shop north of the border in 2013.
But Debi Andrus, marketing professor at the University of Calgary’s Haskayne School of Business , says the discount shops won’t be competing with the likes of Nordstrom.
“It’s not going to be the Walmart or the Zellers…it’s going to be the higher-end stores that are going to have to provide – I would say better service, because that’s what Nordstrom is known for in the states,” Andrus told Global News.
Despite our healthy economy, Andrus warns that sometimes retail concepts from other countries just don’t work in Canada.
“Marks & Spencer tried to come to Canada, even though Canadians knew about Marks & Spencer…you’d think that Canadian-U.K. connection would be there, but it didn’t translate.”
With Nordstrom stores set to open in Toronto, Ottawa, Calgary and Vancouver starting in the fall of 2014, only time will tell how significant its impact will be on retailers and the Canadian luxury market.
– With files from the Canadian Press, The Calgary Herald
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