Nordstrom has announced it will be shutting down all Canadian Nordstrom’s and laying off 2,330 employees. Nordstrom Inc. says it is winding down its Canadian operations and closing all 13 of its stores in the country.
Nordstrom, Inc. had reported second-quarter net earnings of $126 million and earnings per diluted share of $0.77 for the quarter ended July 30, 2022.
Excluding costs associated with the wind-down of Trunk Club, the company reported adjusted earnings per share of $0.81. Nordstrom's customer strategy is centered on three strategic pillars: providing a compelling product offering, delivering outstanding services and experiences, and leveraging the strength of the Nordstrom brand.
The company, which launched in Canada in 2014, has six Nordstrom stores and seven Nordstrom Rack locations. All stores will close and all the company’s staff in Canada will be let go.
In court filings, the company says Nordstrom’s Canadian business has continued to lose money every year since opening its operations.
“We entered Canada in 2014 with a plan to build and sustain a long-term business there. Despite our best efforts, we do not see a realistic path to profitability for the Canadian business,” the company said in a statement.
Gift cards will only be accepted until the end of in-store liquidations that will be taking place — plans to start happening around mid-March. Nordstrom in Canada will no longer be issuing new gift cards as of today (Thursday).
"We took decisive actions to right-size our inventory as we entered the new year, positioning us for greater agility amidst continuing macroeconomic uncertainty. We also made the difficult decision to wind down operations in our Canadian business. This will enable us to simplify our operations and further increase our focus on driving long-term profitable growth in our core U.S. business," said Erik Nordstrom, chief executive officer of Nordstrom, Inc in a press release.
He continued: “As we enter fiscal 2023, we are focused on enhancing the customer experience, improving Nordstrom Rack performance, increasing inventory productivity and continuing to advance our supply chain optimization initiatives. We remain confident in the strength of our brands and our ability to drive profitable growth and deliver long-term value to our shareholders."
The company’s Nordstrom.ca site has stopped sales effective immediately on March 2, and the company expects to wind down its brick-and-mortar operations by late June 2023. Any orders placed online before Thursday will be filled, but no new orders will be processed online. After March 17, all sales are final and returns and exchanges will no longer be permitted.
"The closures will leave many Canadians without access to high-end department stores and accessibility to luxury goods, with shopping destinations such as Holt Renfrew also closing down in cities such as Edmonton. The closing of Nordstrom stores will have a ripple effect on employment, as jobs will continue to be lost in cities like Vancouver and Langley due to these stores leaving Canada, for good," said Retail Expert, Jeanel Alvarado.
The closure of six Nordstrom, seven Nordstrom Rack locations, 54 Bed Bath & Beyond and 11 BuyBuy Baby stores will leave many Canadian shoppers searching for alternative places to shop. This is especially concerning for those who have come to rely on these stores as a go-to source of luxury goods, baby items and home goods.
"Nordstrom's U.S. parent is looking at the prospect of a recession in its home market and taking the opportunity to cut out anything that isn't adding cash to its bottom line," said Alvarado.
Despite this, Nordstrom's earnings have exceeded expectations, and the company remains confident in its ability to deliver on its long-term strategic and financial goals.
