Nordstrom launches Canadian credit card

HOUSE BRAND VISA

TORONTO • Nordstrom

Inc. is launching a housebranded Visa card in Canada, aiming to drive up sales and encourage repeat shopping by giving customers added loyalty rewards incentives.

The news comes more than two years after Nordstrom’s debut in this country, where the upscale department store aims to more than triple its Canadian sales to US$1 billion as it expands in this market. Rival Saks, owned by Hudson’s Bay Co., introduced a house credit card with Capital One bank when it opened its first stores in Canada last year.

It also lands at a tumultuous period for retail department stores amid industry concerns about increasing numbers of customers shopping online.

On Friday, Nordstrom’s shares plunged more than 10 per cent after the retailer reported late Thursday a firstquarter same-store sales drop of 0.8 per cent, below analysts’ predictions for a 0.1-per-cent sales slide at established stores.

That followed grim news from Hudson’s Bay on Thursday, when the Canadian retailer reported a 2.4-per-cent same-store sales tumble at its department store group, which includes Lord & Taylor and Hudson’s Bay department stores, while same-store sales at Saks declined 4.8 per cent.

Steven Mattics, president of Nordstrom’s credit division, said the retailer has been able to drive up sales by tailoring offers to consumers’ specific shopping habits based on data gleaned from its loyalty program.

“We look at (the data) rigorously and frequently and see what incremental sales we get from customers who have our cards,” Mattics said. “It is substantial.”

Members of the retailer’s Nordstrom Rewards program account for 44 per cent of sales at the department store chain, and typically spend three to four times more than non-rewards customers.

Nordstrom’s five Canadian stores had sales of US$300 million in 2016. The retailer plans to open one more fullline store in Canada as well as 15 to 20 of its off-price chain, Nordstrom Rack.