Nordstrom has announced plans to close its two downtown San Francisco locations, dealing a significant blow to the city's retail landscape. The flagship store at Westfield San Francisco Centre will shut down at the end of August, while the Nordstrom Rack on Market Street is set to close on July 1. The company has cited changing market dynamics and deteriorating conditions in the area as the primary reasons for these closures.
Over the past several years, the downtown San Francisco market has experienced a dramatic shift, impacting customer foot traffic and the ability of stores like Nordstrom to operate successfully. Unibail-Rodamco-Westfield, the owner of the Westfield mall where Nordstrom is located, has been more blunt in their assessment, blaming the city for "unsafe conditions" and a "lack of enforcement against rampant criminal activity."
The closures come at a time when San Francisco is struggling to refill empty offices downtown and in the Financial District due to the pandemic and remote work. Malls have also been losing popularity with shoppers as they increasingly turn to online shopping. Furthermore, incidents of theft in San Francisco have gained national attention, although crime rates have generally fallen over the past six years.
“Nordstrom's decision to shutter its downtown San Francisco stores reflects the changing dynamics of the city's retail landscape, influenced by factors such as remote work, a shift towards online shopping, and concerns about safety and crime,” said Retail Expert, Jeanel Alvarado.
Daniel Herzstein, director of public policy at the SF Chamber of Commerce, expressed disappointment and sadness at the news, acknowledging that while the city is working to clean up its streets and bring people back to the office, it may not have done enough quickly enough. Supervisor Aaron Peskin also noted that the loss of Nordstrom is a serious blow to the city.
“As the city continues to grapple with these challenges, it remains to be seen how other retailers will adapt to the evolving market conditions,” said Alvarado.
Nordstrom's exit follows a trend of well-known chains closing in San Francisco, including Whole Foods and Safeway. The San Francisco Standard, an independent news website, has tracked 20 closures of major stores since 2020, such as Anthropologie, Office Depot, and CB2.
Despite the closures, Nordstrom remains committed to the Bay Area market and has made significant investments in its stores there over the past several years. The company plans to focus on its 16 nearby Nordstrom and Nordstrom Rack locations, as well as online sales. Additionally, Nordstrom is expanding its off-price fleet nationwide, with 20 new Rack locations planned for this year and more in 2024.
