Nordstrom Canada is closing all stores in June


Retail giant Nordstrom will exit the Canadian market and close its 13 stores in the country amid stagnant sales, the company said. The move will cut approximately 2,500 jobs.

Nordstrom’s decision makes it the second major US retailer to close operations in Canada this year. Bed Bath & Beyond, which was on the verge of filing for bankruptcy in the United States, had filed for bankruptcy in February to close its stores in Canada, court documents show.

Court records from Nordstrom in Canada paint a bleak picture. The company lost money every year it operated in Canada, the company told the court, adding that the Canadian affiliate generated only 3 percent of the group’s net sales. Since its inception, the Canadian entity has received $775 million in funding. High operating costs and aftershocks from the coronavirus pandemic led to the company’s decision to close, it said.

“We entered Canada in 2014 with a plan to build and sustain a long-term business there,” Erik Nordstrom, CEO of the family-owned company, said in a statement. “Despite our best efforts, we do not see a realistic path to profitability for the Canadian company.”

The company operated six Nordstrom stores and seven discount stores called Nordstrom Rack in Canada. Canada’s local e-commerce website stopped working Thursday, while stores are expected to close at the end of June, the company said.

The move will hit the company’s outlook for 2023: The wind-down is predicting the company’s net sales to fall by $400 million this year, Nordstrom’s quarterly earnings report said. The company expects a 2 percent drop in sales.

Analysis: Nordstrom’s salvation lies in the luxury section

The Seattle-based company operates more than 300 stores in the United States and reported earnings of $119 million for the most recent quarter. Men’s clothing, shoes and women’s clothing experienced the strongest growth last year compared to 2021.

“There is no change in Nordstrom US’ operations or stores and Nordstrom US will continue to operate on a business-as-usual basis,” the company said in a statement.

Fitch Ratings had downgraded Nordstrom’s rating early in the year, citing operational challenges and multiple changes in off-price business. But the stock soared in February when billionaire investor Ryan Cohen bought a stake in Nordstrom.

Nordstrom’s failure in Canada is not unique. Several other US companies have failed to become profitable in Canada. Target, which operated more than 100 stores in Canada, pulled out of the country in 2015. Another department store chain, Sears, closed its last branch in Canada in 2018 after a 65-year run.






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