The March 2023 announcement by Nordstrom stating its intent to shutter all 13 of its Canadian stores—including six Nordstrom and seven Nordstrom Rack locations—as well as its e-commerce operations at Nordstrom.ca, left many in the retail world reeling. Open in Canada since 2014, with locations in cities including Vancouver, Calgary and Toronto, the Seattle-headquartered company’s decision was cited as being due to an inability to “see a realistic path to profitability for the Canadian business,” according to a statement. In addition to being a huge hit to employees, Michelle Addison, a Vancouver-based retail industry insider who worked at the Vancouver Nordstrom location as one of the top-performing personal shoppers in the company, says the closure leaves a void in the Canadian retail landscape.
“So many talented people lost their jobs, very well-paying jobs, and this is a huge loss to them and their families that rely on that income,” Addison says. “I feel that the departure of Nordstrom is an indication of declining fashion options in Canada … Nordstrom allowed a diverse price point to the Canadian customer. The customer will have to work much harder at finding new brands, price points or finding a wide range of sizing.”
As a retail insider for well over a decade, Addison has a distinct perspective as to what makes the Canadian retail landscape simultaneously one of a kind—and challenging. “I think what makes the Canadian retail market unique is that our country is made up of so many diverse people, living far apart, in different climates and all with different needs and different economic abilities to spend disposable income,” she says, adding that she’s also noted a shift in the country’s retail consumer base as playing a role in its challenging landscape.
“I have seen a decrease in the ‘middle,’ leaving high and low shoppers. Clients who used to shop all the time shop less frequently now and are more conscious of what they buy. The demand for luxury shopping is still high, but clients want more information on the products, styling and expect a high level of service for their loyalty.”
The pandemic, and its related retail hurdles such as temporary store closures and a decrease in in-person shopping, as well as a general slowdown in the economy, also play into this shift, she says. “Buying for the customer is a challenge as disposable incomes change, as travel goes up, or interest rates, or food prices rise. The same customer may not repeat the same patterns year-to-year depending on their changing budget,” Addison explains. “Investment pieces and high-value products are regarded and valued vastly different than they were before the pandemic.”
Despite these challenges, she says there can be a silver lining to the departure of Nordstrom. “The good news is that it will make consumers more mindful, and this leads to sustainable shopping, more support for local brands [and give] small boutiques and bigger Canadian department stores a chance to catch some of the market.”
In operation since 1837, Canadian department store Holt Renfrew is at the “forefront” of the retail scene thanks to its interest in the luxury retail space with initiatives that highlight sustainability. “The Holt Renfrew business is strong and we have momentum heading into 2023, as a Canadian, purpose-led company focused on delivering our mission to empower self-expression and ignite positive change,” Adam Grachnik, DVP and lead of corporate affairs and communications, says. “We are unified by our values and believe in the future, making significant investments in our store network, evolving our spaces for even more meaningful connection and experiences for all our stakeholders.”
Grachnik points to developments such as a renewed lease on Holt Renfrew’s Calgary location and enhancement of its Yorkdale location as two indicators of the company’s emphasis on strengthening its “position and shopping experience” for the Canadian fashion customer. The emphasis on growth is echoed by Bernard Leblanc, president and CEO at La Maison Simons. The 183-year-old Quebec-headquartered retailer operates 16 beautiful stores across Canada, with a 17th opening in Halifax in 2024. The company, Leblanc says, is “analyzing all potential opportunities in Canadian markets,” noting a particular interest for growth in the Metro Vancouver and Greater Toronto areas.
“We are not rushing things and are patiently waiting for the right opportunity, at the right moment, in the right place, at the right price,” Leblanc says. “We don’t want to be the biggest retailer. What is most important for us is to be the best in the eyes of our customers.” He adds that the in-store experience will be a primary emphasis for Simons moving forward. “The pandemic has certainly brought about major upheaval in the retail sector in general and I believe that we are currently at a crossroads: online shopping has seen tremendous growth in recent years but, at the same time, there is a strong return to in-store sales,” he explains. “This proves, beyond a doubt, that consumers want to enjoy a hybrid shopping experience and that the in-store experience remains essential.”
The requirement of having both in-store and e-commerce strength is an additional element playing into the challenging landscape of Canadian retail, according to Leblanc. “Since retailers will need to offer customers a seamless and exceptional unified shopping experience, without any breaking point, wherever and whenever the customer wants. That’s not an easy task, but, in my eyes, it’s a very important one.”
In addition to emphasizing up-and-coming designers and in-house brands such as Édito par Simons, a high-end capsule collection from the company conceived by more than 175 designers and creatives in the fashion scene, Leblanc stresses that providing a complete, “seamless” customer service approach will be their main mission moving forward. And, the investment of Canadian retailers such as Holt Renfrew and Simons in the market leaves Addison confident they will close the gap left behind by the departure of Nordstrom this summer. “Department stores are not dead,” she says. “I think we are prime for disruption in department stores and creating new experiences in-store is just one way to change the game.” —Aleesha Harris
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