Nordstrom (NYSE:JWN) opened its first Canadian store as the retailer entertains big plans to expand there, in spite of other U.S. chains’ struggles to connect with shoppers north of the border.
The 113-year-old chain held the grand opening of a 140,000-sq.-ft. store in Calgary, Alberta, on Sept. 19. The location, in Chinook Centre, is the first of six announced Nordstrom stores planned to open in the next three years. Three additional stores are planned for Ottawa, Vancouver and Toronto.
There has been a rush by U.S. retailers to expand into Canada with mixed success. Target’s market entry there last year with 100 stores has been a disaster. The unit lost $1.36 billion in pre-tax earnings after opening 130 stores. Former CEO Gregg Steinhafel stepped down and the board subsequently fired the president of Canadian operations, Tony Fisher, after the branch finished its first year with a four-quarter operating loss of $329 million.
What makes Nordstrom management think they can succeed where other U.S. chains have failed?
“We are certainly mindful of the competition here,” Pete Nordstrom, president of merchandising for Nordstrom, told Women’s Wear Daily. “We’re not looking to create some kind of Canadian Nordstrom. We want to operate the best Nordstrom we can… We are coming in with all guns blazing, to give them the best Nordstrom offer we can.”
Conquering distribution, inventory and pricing—issues that have plagued Target— will be key.
“If we are going to compete, we’ve got to have a really good distribution of vendors,” Nordstrom toldWWD. “That’s the stuff we are working on right now.
Calgary will serve as a learning lab of sorts as the retailer works out operational issues. Its next Canadian store is slated to open in Ottawa’s Rideau Centre on March 6, 2015.
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Jarrett Neil Ridlinghafer
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Synapse Synergy Group, Inc.
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