Nord­strom chooses to play the long game

Com­pany’s sixth full-line store in Canada open­ing to pub­lic at Sher­way Gar­dens on Fri­day


Nord­strom is pre­par­ing to open its sixth full-line store in Canada, at Sher­way Gar­dens on Fri­day, amid re­ports that the chain is close to choos­ing a firm to help it fund a buy­out that will al­low the pub­licly traded re­tailer to go pri­vate.

Nord­strom Inc.’s stock price rose fol­low­ing a CNBC re­port stat­ing pri­vate eq­uity firm Leonard Green & Part­ners has of­fered to pro­vide $1bil­lion (U.S.) to help take the fam­ily busi­ness pri­vate.

The fam­ily an­nounced in June that it wanted to go pri­vate to con­tinue its turnaround plan out­side the glare of pub­lic mar­kets, giv­ing them an op­por­tu­nity to test new con­cepts with­out trig­ger­ing neg­a­tive share­holder reaction.

Ac­cord­ing to one es­ti­mate, the move would re­quire rais­ing be­tween $7 bil­lion and $8 bil­lion in debt to fi­nance the deal.

A spokesper­son for Leonard Green was not avail­able for com­ment. Jamie Nord­strom, pres­i­dent of stores, de­clined to com­ment.

“As you can imag­ine, there is a lot of pro­to­col around how those things work and so, my an­swer is, I have to re­fer you back to that (June) an­nounce­ment,” said Nord­strom in an in­ter­view Mon­day with the Star about the new Sher­way store.

Af­ter open­ing the Sher­way lo­ca­tion on Fri­day, the com­pany will fo­cus on open­ing six Nord­strom Rack locations in Canada, Nord­strom said.

Three Nord­strom Racks are sched­uled to open in the GTA: at Vaughan Mills in March; at One Bloor in May and at Heart­land Town Cen­tre in Mississauga in the fall of 2018.

The stores will sell ap­parel, ac­ces­sories and shoes at sav­ings of 30-70 per cent off reg­u­lar prices and carry mer­chan­dise from Nord­strom stores, as well as spe- cially pur­chased items from some of the top brands sold at Nord­strom.

“It’s not out­let mall mer­chan­dise, where they will take this cool shirt, but say, ‘let’s make it cheaper, let’s put a cheaper but­ton on it and make it in a cheaper fac­tory with cheaper stitch­ing and cheaper fabric,’ ” Nord­strom said.

“We don’t do that. That is the out­let mall model and that works re­ally well for them. Our model is this is all first-qual­ity mer­chan­dise that ei­ther was avail­able for sale at our full-line store or the ven­dor made to of­fer to our full-line stores.”

For now, Nord­strom is stand­ing pat with six full-line stores and six dis­count locations in Canada, Nord­strom said. While the com­pany con­tin­ues to mon­i­tor pos­si­ble retail op­por­tu­ni­ties, it’s not cur­rently con­sid­er­ing fur­ther ex­pan­sion.

“We will start open­ing Rack stores in the spring and that will take a lot of tal­ent and fo­cus and en­ergy. Once we start mov­ing through that, there may be other op­por­tu­ni­ties, but it’s not some­thing we’re think­ing about right now,” Nord­strom said.

Jamie Nord­strom said the com­pany is not con­cerned about open­ing stores in a retail down­turn.

“We were open­ing stores in 2008 when peo­ple would ask us the same ques­tion and some of those stores were our most suc­cess­ful store open­ings we’ve ever had. Maybe not that first month, but if you take the longterm view, we think be­ing in the right locations, close to our best cus­tomers, is the right strat­egy, re­gard­less of what kind of cy­cle we’re in,” Nord­strom said.

Doug Stephens, founder of Retail Prophet, a Toronto-based retail ad­vi­sory, thinks Nord­strom may be best­placed to sur­vive the de­cline in for­tunes af­fect­ing de­part­ment stores world wide.

“I do think in the Cana­dian mar­ket, we, as con­sumers, are hun­gry for al­ter­na­tives. I mean, how many years have we lived with — there’s Hud­son’s Bay, or if you want to go up­mar­ket there is Holt Ren­frew or Harry Rosen, and re­tail­ers of that ilk.

“But there re­ally hasn’t been any­one re­sid­ing in the mid­dle of those two and that’s where I think Nord­strom has an op­por­tu­nity in terms of po­si­tion­ing — great brand, great ser­vice, great prod­uct, but they also, I think, reach down a lit­tle fur­ther than say, a Holt Ren­frew would. So yeah, I think there is an op­por­tu­nity for them.”

Stephens thinks the dis­count mar­ket may be a lit­tle tighter, with a slew of com­peti­tors in­clud­ing Win­ners, Mar­shalls and Saks OFF 5TH.

“I think that we’re maybe ap­proach­ing a sat­u­ra­tion point,” Stephens said, adding that for the mo­ment at least, the sec­tor still seems to have a lot of en­ergy.

The new Nord­strom store at Sher­way Gar­dens is 140,000 square feet over two floors and was built from the ground up.

The store in­cludes many of the same fea­tures of other Nord­strom stores in Canada, in­clud­ing ca­pa­cious and uniquely de­signed change rooms; 102 works of art, in­clud­ing works by five Toronto artists; a fullser­vice restau­rant and bar, Bazille, on the sec­ond floor and shoe-ty­ing lessons for chil­dren in the chil­dren’s de­part­ment, which in­cludes a play­house with an in­ter­ac­tive screen for games.

New for Toronto is the At Home de­part­ment, which fea­tures lux­u­ri­ous decor, in­clud­ing ca­ble large-knit throws for $119, throw pil­lows, hisand-her wine glasses for $62 and cock­tail es­sen­tials.

At Home will be in­tro­duced to the Ea­ton Cen­tre lo­ca­tion in Oc­to­ber, Nord­strom said.

Also spe­cific to the Sher­way Gar­dens store is the KBeauty sec­tion, which fea­tures a range of Korean beauty prod­ucts, in­clud­ing Hux­ley Korean skin care and the Too Cool for School cos­metic brand.

The cos­met­ics sec­tion fea­tures a trend­ing now sec­tion, with prod­ucts for cus­tomers to try out and a “Mini Must-Haves” area fea­tur­ing smaller ver­sions of prod­ucts for pur­chase.

Nord­strom said re­tail­ers will be do­ing busi­ness very dif­fer­ently five years from now and those in­vest­ing in new ex­pe­ri­ences, in new ways of en­gag­ing cus­tomers, and in ful­fil­ment tech­nol­ogy and sup­ply chain, in­clud­ing mo­bile, are more likely to sur­vive than those that don’t.


The Nord­strom store at Sher­way Gar­dens is 140,000 square feet over two floors and was built from the ground up.

The Sher­way Gar­dens store in­cludes a full-ser­vice restau­rant and bar, Bazille.


The cos­met­ics sec­tion fea­tures a trend­ing now sec­tion and a “Mini Must-Haves” area fea­tur­ing smaller ver­sions of prod­ucts for pur­chase.

Nord­strom now has six stores and six dis­count locations in Canada.

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