Nordstrom delays Rack plans in Canada to reassess costs

As Nordstrom prepares to open its first full line location in Canada later this year, the Seattle-based luxury department store chain has pushed back plans to introduce its discount model, Nordstrom Rack. Nordstrom has decided to delay the launch from 2015 to “about” 2017, as the retail chain’s entrance into Canada proves to be more […]

As Nordstrom prepares to open its first full line location in Canada later this year, the Seattle-based luxury department store chain has pushed back plans to introduce its discount model, Nordstrom Rack.

Photo: Erik Pendzich/Rex

Nordstrom has decided to delay the launch from 2015 to “about” 2017, as the retail chain’s entrance into Canada proves to be more challenging than anticipated, according to an article in the Globe and Mail.

Nordstrom spokesperson Brooke White told the Globe that the retail chain underestimated costs and systems involved with expansion into Canada.

“There are enough differences for us in our distribution and systems that virtually everything that we do in the States we have to alter somehow for Canada, and we had underestimated that,” said White.

White told the Globe there are lessons to be learned from Target Canada’s launch. Target executives have acknowledged that its Canadian launch fell short of expectations. The discount chain faced high expansion costs and disappointing sales as shoppers complained about near-empty shelves and notably higher prices than at U.S. Target stores.

The delayed launch of Nordstrom Rack gives Holt Renfrew time to perfect its HR2 model, which similarly to the Rack, offers designer products at a discounted price. Holt’s opened the doors to its first HR2 location last spring in Toronto and Montreal.

Both HR2 and Nordstrom Rack will face competition from Saks Fifth Avenue’s low-cost offering Saks Off Fifth, which will reportedly open 25 locations in Canada.

Brands Articles

Saputo sells its bakery division to Canada Bread for $120 million

Deal in line with company's plans to become more competitive in new food categories

Why employee engagement needs to top the CMO’s agenda in 2015

And, how it will enhance competitiveness/profitability

Canada’s Hottest Ads: A very foodie November

...with a light dusting of holiday cheer

McDonald’s marketing misery

Markus Giesler on the chain's identity crisis and why it's becoming increasingly irrelevant

BlackBerry harkens back to “CrackBerry” heyday

Waterloo, Ont.-based company introduces new smartphone model with familiar features

Hudson’s Bay hires new CEO

Former Toys R Us chairman and CEO takes the reins, Richard Baker remains chairman

Country Style chooses Tag Franchise for rebrand

New branding expected to roll out next year

MasterCard’s ‘priceless’ holiday giveaway

The brand had a big surprise for Calgary charities