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.

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