Themacforums, March 03, 2023 – Nordstrom to Close all Its Canadian Stores. Due to stagnating revenues, retail behemoth Nordstrom announced that it would leave the Canadian market and close its 13 stores there. 2,500 jobs will be lost as a result of the decision.
With its decision, Nordstrom becomes the second significant US retailer to cease operations in Canada this year. According to court records, Bed Bath & Beyond, which has nearly declared bankruptcy in the United States, announced in February that it will be closing its locations in Canada due to financial difficulties.
Nordstrom’s court documents from Canada paint a bleak picture. According to the company’s testimony in court, it lost money every year it operated in Canada and just 3 percent of the group’s net sales were produced by the Canadian subsidiary.
The Canadian organization has received $775 million in financing since it was founded. The company said that its decision to shut down was motivated by high operational costs and the effects of the coronavirus pandemic.
Erik Nordstrom, the CEO of the family-run business, said in a statement, “We entered Canada in 2014 with the intention to create and sustain a long-term business there. We do not see a viable route to profitability for the Canadian firm, despite our best efforts.
In Canada, the business ran six Nordstrom stores and seven Nordstrom Rack outlet outlets. According to the corporation, the local Canadian e-commerce website shut down on Thursday, and the stores should close by the end of June.
The decision will hurt the company’s prospects for 2023: According to Nordstrom’s quarterly earnings report, the company’s net sales are expected to decline by $400 million this year due to the wind-down. The business predicted a 2 percent decline in revenue.
The Seattle-based business, which runs more than 300 locations around the country, posted $119 million in earnings for the most recent quarter. The fastest-growing categories last year compared to 2021 were shoes, clothes for men, and apparel for women.
The company issued a statement saying, “There is no change to Nordstrom US’s operations or stores and Nordstrom US continues to operate on a business-as-usual basis.
At the beginning of the year, Fitch Ratings had cut Nordstrom’s rating due to its operational difficulties and numerous off-price business adjustments. But, after billionaire investor Ryan Cohen acquired a stake in Nordstrom in February, its price rose sharply.
The failure of Nordstrom in Canada is not unusual. Several US businesses have had trouble turning a profit in Canada. In Canada, Target had more than 100 stores, but it left the nation in 2015. After 65 years, a different department store business, Sears, shut down its final location in Canada in 2018.