Nordstrom’s departure from the retail landscape in Canada will leave significant holes in malls, and some analysts say landlords will have to get creative to fill the space.
If malls want to find tenants similar to Nordstrom, they could look to rival department stores Hudson’s Bay, Simons or Saks Fifth Avenue, said Tamara Szames, executive director and industry advisor for Canadian retail at the research firm NPD Group.
But with such companies heavily committed to the apparel sector — the only leads in the industry’s NPD group that have yet to recover from the COVID-19 pandemic — she thinks it’s more likely that the Nordstrom owners will think outside the box to fill Seattle department store spaces.
“Consumers are returning to stores and we’ve seen that they’re really looking for an entertainment experience (along with) shopping, so being creative with leases and rentals of these properties is something mall owners will need to look at, ” she says.
She pointed to pop-ups, food properties and experience-based spaces like Barbie’s World – an interactive, pay-to-play version of Barbie’s Dreamhouse at the Square One mall in Mississauga, Ontario, as potential Nordstrom replacements.
Learn more:
Nordstrom will close all of its stores in Canada, cutting 2,500 jobs
Kate Camenzuli, vice president of retail at real estate firm CBRE, echoed those sentiments.
“The world is our oyster,” she said. “These (owners) travel all over the world, to see everything that’s available, and so maybe it’s something that we haven’t even seen in the Canadian market yet, and maybe it’s not- not be a department store. It might not even be a food hall.
Nordstrom’s largest Canadian owner, Cadillac Fairview, has yet to outline specific plans for the chain’s starting spaces, which are often anchor tenants in its malls.
Nordstrom’s six Canadian stores – CF Chinook Center in Calgary, CF Rideau Center in Ottawa, CF Pacific Center in Vancouver and CF Eaton Centre, Yorkdale Shopping Center and CF Sherway Gardens in Toronto – have between seven and 10 years remaining on their leases.
Nordstrom Rack, which promised luxury brands at bargain prices, has seven Canadian stores with between five and eight years on their leases.
Nordstrom intends to close the Canadian branches of both chains by June, leaving its 2,500 Canadian employees unemployed and hundreds of thousands of spaces to fill.
The CF Eaton Center location alone occupied more than 220,000 square feet over three levels, when it opened in 2018.
Camenzuli expects Nordstrom owners to look at each space individually and assess what kind of ambiance they want to create in the property.
For some, this could mean Nordstrom being replaced by another large-format retailer or an international brand looking to expand or break into Canada.
In other cases, it will mean that the large spaces occupied by Nordstrom will be divided into smaller stores that can be rented to a wider range of tenants who do not need as much space.
Any business looking to expand will find what it offers appealing, Camenzuli said, because Nordstrom had prime properties in high-traffic areas.
Even though Nordstrom landlords were caught off guard by the chain’s departure, she said most major real estate companies still had plans for who they wanted to attract if their tenants left.
“Even though it’s sad to see a Nordstrom player leave, it gives us the opportunity to do things that have never been done before,” she said.
“And all of these teams that now have these opportunities have probably had all these things in their back pocket that they’ve been thinking about for months.”
© 2023 The Canadian Press
#Closure #Nordstrom #Canada #fill #vacancies #large #malls #National
