Nordstrom’s first Canadian store is getting mixed reviews from retail insiders, with many warning the Seattle-based chain to operate as close as possible to the way its 271 U.S. stores are run or risk steep losses.
The department store chain (NYSE:JWN) opened its first Canadian location in Calgary September 19 and is expected to open:
•in Ottawa in March, 2015;
•in Vancouver in September, 2015; and,
•the first of three Toronto stores starting in fall 2016.
“Nordstrom is risking going down the same road as Target by not providing what the customer is looking for, and expecting in stores from experiences in the U.S.,” said Graeme Silvera, who is Ivanhoe Cambridge’s vice-president of development for Oakridge Centre.
His allusion to Target refers to that U.S. retailer coming north as part of a $4 billion expansion that included opening more than 130 stores across Canada starting in 2013.
Target then promptly lost about $1 billion in its first year of operations after being widely panned for having empty shelves and higher than expected prices.
“The initial things I’ve heard … is that [Nordstrom] feels like a bit of a letdown,” said Silvera, who was on a panel at the October 29 Vancouver Real Estate Leasing Conference.
Silvera’s employer owns malls and competes with Cadillac Fairview, which owns the malls in which Nordstrom has leased space.
Other panellists, however, also sounded warning bells for Nordstrom and urged the high-end department store chain not to deviate from the template it successfully employs.
Panellist and Orange National Retail Group (B.C.) Inc. president, Lenora Gates, said that if Nordstrom does deviate from that template, it could face a “backlash” similar to the one that Target experienced.
“The fact that Nordstrom is heading down the path [that Target took] could be really dangerous,” she said.
Gates said Nordstrom is best known for providing top-notch service and stressed that this will be a key thing that Canadian shoppers will expect.
One panellist praised Nordstrom’s 531-employee Calgary store – Northwest Atlantic principal Brodie Henrichsen, whose real estate consulting firm lists Nordstrom as a client.
He said he visited Nordstrom’s Calgary store last week and was impressed that within five minutes several store clerks approached him to welcome him and ask what he was looking for.
“It really is too soon to tell how well Nordstrom will do,” Wesgroup Properties director of leasing Bob Nicholson, who watched the panel discussion, told Business in Vancouver.