A list of Retailers that have closed down in Canada

The Canadian retail market has proven to be a formidable challenge for many American and international brands. Despite the geographical proximity and cultural similarities between Canada and the United States, several high-profile retailers have struggled to establish a sustainable presence north of the border.

According to Statistics Canada (Stat Can), there was a sharp drop in active businesses in June 2023; there were fewer openings than closures, and the number of active businesses shrunk by 0.8% or 7,327 in June. The reasons for these struggles are multifaceted, ranging from operational inefficiencies and supply chain issues to a lack of understanding of local consumer preferences. Let's dive into the recent exits of major retailers like Nordstrom, Bed Bath & Beyond, and The Body Shop, as well as the strategic withdrawal of Clarins from Hudson's Bay stores.

American Retailers' Struggles in Canada

Several American retailers have found establishing a foothold in the Canadian market challenging. Simply hiring a Canadian team is insufficient to grow in the Canadian market; the nuances between major cities and consumer preferences across Canada differ significantly.

High-profile exits include Nordstrom, which closed all its six Nordstrom locations and seven Nordstrom Rack stores in March 2023, cutting 2,500 jobs. Other notable exits include Bed Bath & Beyond, Target, and Lowe's, each citing various operational challenges and market misalignments.

Beauty retailer The Body Shop Canada recently announced the closure of 33 of its 105 stores and the discontinuation of its e-commerce operations as part of a restructuring effort under the Bankruptcy and Insolvency Act. This decision came shortly after its parent company sought creditor protection in Britain. The company owes over $3.3 million to unsecured creditors and about $16,400 to secured creditors.

Adding to the list of brands exiting the Canadian market, French luxury makeup and skincare brand Clarins has decided to pull out of Hudson's Bay stores across Canada. This mutual decision, confirmed by Clarins and Hudson's Bay, Clarins will remain available in other retail outlets such as Shoppers Drug Mart and Sephora. Still, its departure from Hudson's Bay signifies a strategic realignment.

List of Retailers and Brands Exiting Canada

The following is a comprehensive list of retailers and brands that have exited the Canadian market during and after the pandemic:

1. Nordstrom and Nordstrom Rack - Closed all Canadian stores in March 2023. They struggled with high operating costs, an inventory glut, and lackluster sales exacerbated by the COVID-19 pandemic. Their rapid expansion and failure to adapt to Canadian consumer preferences led to their downfall.
2. Bed Bath & Beyond - Exited the Canadian market, leaving significant vacant retail space. Faced financial difficulties due to higher costs than revenue, cultural differences in consumer preferences, and a focus on larger living spaces that did not align with Canadian shopping habits. The pandemic further strained their operations, leading to bankruptcy and store closures.
3. SoulCycle - Exited Canada amid rent disagreements and a shift towards at-home fitness options during the pandemic, losing market share to competitors like Peloton.
4. Target - Pulled out of Canada due to operational challenges. The withdrawal was marked by poor customer service, a lack of product selection, bad presentation, and pricing that did not meet customer expectations. The aggressive expansion plan and incomplete supply and pricing strategies resulted in an unpleasant shopping experience for Canadian consumers, leading to the retailer's eventual exit.
5. Lowe's - Exited the market for various reasons. It faced similar challenges, struggling to compete with established Canadian home improvement retailers. The company's inability to effectively manage inventory and align its product offerings with local preferences led to its closing stores in Canada.
6. GameStop - Closed operations between 2020 and 2021. Faced financial difficulties and changing consumer behaviors, particularly the shift towards online shopping.
7. Gymboree - Exited in January 2019.
8. hmv - Closed in 2017, the music and entertainment retailer struggled to compete with the rise of digital streaming services, leading to its closure in Canada.
9. Delissio, Stouffer's, Lean Cuisine, and Life Cuisine - Gradually pulled out post-pandemic.
10. Skippy Peanut Butter - Recently announced exit.
11. Bonus: Kleenex - Recently announced exit in 2024

Conclusion

From high operational costs to the need for better market adaptation, these factors have driven many brands to reconsider their presence in Canada. The pandemic disrupted supply chains and increased production costs, making it difficult for these brands to maintain profitability in Canada. As brands like Nordstrom, The Body Shop, and Clarins reevaluate their strategies, it becomes clear that success in Canada requires more than just replicating U.S. business models. It demands a tailored approach that considers Canada's distinct economic, regulatory, and cultural landscape. For future entrants, the lessons learned from these high-profile exits could provide valuable insights into navigating this complex market.