Nordstrom has announced that it will be shutting down all 13 of its Canadian stores. Approximately 2,330 people will lose their jobs as a result.
Founded in 1901, the American luxury department store chain launched its Canadian operations in 2014 with seven Nordstrom Rack locations and six Nordstrom stores. According to court filings, however, the company has lost money every year since it opened.
In a statement, the company stated that they had planned on “building and sustaining a long-term business” in Canada, but that despite their best efforts, they no longer “see a realistic path to profitability”.
The company has since filed for protection from its creditors under the CCAA Act, a law that manages the orderly shut-down of businesses, which is also known as “Chapter 11″ bankruptcy” in the U.S. Its purpose is to enforce rules so that as much money as possible is collected and paid back to the creditors.
Since the announcement on Tuesday, the company has stopped their sales immediately. Online orders placed before Thursday will still be fulfilled and shipped but they will no longer be accepting any new orders. Returns and exchanges will also no longer be permitted after Friday, March, 17. However, the company will be honoring gift cards until the end of their liquidation. New gift cards, on the other hand, will no longer be available.
According to retail consultant Doug Stephens, the luxury department chain has been squeezed on all sides- by luxury brands from above and discount brands from below. The rising popularity of e-commerce has also added competition. As a result, Nordstrom’s parent company is cutting out everything that isn’t bringing in profits, including the Canadian stores.
Nordstrom is the second major American chain to wind down its Canadian operations this year. Just a few weeks prior, Bed Bath & Beyond announced that they would be shutting down all 65 of their Canadian locations.