* Four stores planned for Cadillac Fairview malls
* Nordstrom to open lower-priced Rack stores as well
* Credit card planned, but no timetable offered
* Nordstrom joins parade of U.S. retailers coming to Canada
By Allison Martell
TORONTO, Sept 13 U.S. luxury retailer Nordstrom
Inc sees potential to open more than a dozen of its
lower-priced Rack shops in Canada, and will start rolling them
out after it opens the first of its namesake department stores
in the country in the fall of 2014.
Formally announcing the opening of four full-sized Nordstrom
stores in Canada on Thursday, the Seattle-based company's
president, Blake Nordstrom, said the northern expansion was "the
Years in the making, Nordstrom's first international venture
came up against a tight commercial real estate market in Canada.
"There are few retail centers that warrant the kind of
investment and the kind of store we have, and so there isn't a
plethora of choices," he said in an interview.
The company is one of a long list of U.S. retailers
expanding into Canada, lured by a relatively resilient economy
and customers who are often already familiar with U.S. brands.
U.S. discount chain Target Corp is set to open 125
Canadian stores starting next spring, a move that is expected to
shake up the market.
Nordstrom will open in Calgary's Chinook Centre in the fall
of 2014, Ottawa's Rideau Centre and Vancouver's Pacific Centre
in the spring of 2015, and Toronto's Sherway Gardens in the fall
All four malls are operated by commercial real estate
heavyweight Cadillac Fairview, which is owned by the Ontario
Teachers' Pension Plan.
In Canada, Nordstrom will come up against closely held
luxury department store chain Holt Renfrew.
The move also comes as Hudson's Bay Co pushes to move its
Canadian business upscale and eyes an initial public offering.
The company's flagship chain, The Bay, has been swapping out
brands, pushing to improve customer service and hosting
high-profile celebrity fashion events at remodeled downtown
HBC will feel pressure from Target at the low end, and at
some locations, from Nordstrom at the high end, said Alex
Arifuzzaman, partner at InterStratics Consultants Inc.
"They're going to have to address that through marketing,
through product, through pricing, and it's going to be a
challenge, but it's not an insurmountable challenge," he said.
RACK IN CANADA
Blake Nordstrom said he is confident about finding space for
his company's smaller Rack outlets in the Canadian market.
"I think in an ideal world we'd get a full-line store open,
our first is Calgary, and then shortly thereafter start looking
at Racks," he said.
He sees the potential for up to nine full Nordstrom stores
and 12 to 15 Racks in Canada.
In August, Nordstrom boosted its profit and sales forecasts
for the year, helped by sales at the Rack chain, which it plans
to expand dramatically in the next four years. It said it was
aiming for 230 Rack stores by the end of 2016, up from 110.
The company also plans to have offer a credit card in
Canada, but the president said it is too early for specifics.
LUXURY RETAILERS MARCH ON
Despite a sluggish economy, U.S. luxury chains such as
Nordstrom, Neiman Marcus Group and Saks Inc
have outperformed those that cater to middle- and lower-income
shoppers, as affluent consumers keep spending.
Still, all three companies have been cautious, generally
choosing to ramp up outlet chains rather than expand their
In three Canadian cities, Nordstrom will take over stores
that Sears Canada is set to close this fall. In
Toronto, it will locate in an expansion of Sherway Gardens.
Nordstrom named Karen McKibbin president of Nordstrom
Canada. McKibbin, who has been with Nordstrom for 27 years, was
most recently vice president and regional manager for northern
California and Hawaii. She will hire about 1,000 local
Founded in 1901, Nordstrom operates 117 full-line stores and
113 Rack stores in the United States.