The site had been empty for a while, and the location was irresistible -- the Eaton Centre -- an enormous mall in downtown Toronto that opened in 1977 that gets 1 million visitors a week.
Nordstrom, whose first Canadian stores opened in Calgary, Ottawa and Vancouver, entered the country's largest and most competitive retail marketplace on September 16.
Their first Toronto store, with 220,000 square feet, sits on three floors. It will soon be joined by a second Toronto location, in an uptown mall, Yorkdale Shopping Centre, on October 21, and a third Toronto store at another suburban mall, CF Sherway Gardens, on September 15, 2017.
“We pursued locations in Canada for a number of years prior to our announcement in 2012," Nordstrom president Karen McKibbin told me.
"Canada was a challenging real estate market in terms of finding the right locations. There’s less retail overall and truly premier locations are harder to come by. We also wanted to be able to open with some scale and had to wait until everything fell into place so that we could do that. Our first store opened at CF Chinook Centre in Calgary in September 2014.”
The new store, filled with original Canadian art and carefully-merchandised products, is a major change from its predecessor.
"You’d be hard pressed to find any remnants of Sears, [the previous lease holder]," said Takara Small, a Toronto tech and business reporter. "What was once a drab, closely packed space that featured out-of-date displays and chipped racks is now bright and cheery. Even the store lighting seems to be updated to perfectly highlight the clothing and products on display."
"Every display, clothing rack and floor tile has been scrubbed, buffed and polished to perfection. The store is definitely one of the cleanest spaces in the mall."
“It took us 18 months to completely retrofit the existing architectural space," McKibbin said. "Updates included modernizing the exterior of the building as well as creating clear circulation around existing escalators and elevator locations. All of our Canadian locations feature our latest store design concepts.”
“I’m really impressed with how many people there are here to help shoppers, like me, and how they’ve positioned the displays," said shopper Jene Lazar. "It doesn’t feel cramped when I walk around and that’s important to me.”
“Here there are so many people on hand to help me find whatever I want," said Cecilia Ko, a student who walked over from Ryerson University, a few blocks away.
"I think Nordstrom got it right," said Shawn Kotania, another shopper, and the retail operations manager at Rockport Canada. "They have the right look, and slow rollout growth across the country that Target didn’t have. And we know how that ended."
“You can see the detail when you look at the tables and displays and see that they really put in the effort to make it as appealing as possible. We, [he and his coworkers], popped in to look around after reading more about the store, and we think they’re doing a great job.”
Toronto has a few department stores for Nordstrom to compete directly with -- the Hudson's Bay Company, Saks and Holt Renfrew, two of which sit barely a few blocks away from the Eaton Centre.
"I think that's one of its advantages," says Alan Middleton, CLA Assistant Professor of Marketing and Executive Director, Schulich Executive Education Centre (SEEC) at Toronto's York University.
"It will get the middle and higher-end shopper who'll maybe buy one thing, and get them used to buying something special as a present."
Even though the surrounding area can be rough -- with homeless beggars on the surrounding streets and a stabbing in the mall only four days after Nordstrom opened -- the location was a no-brainer, Middleton said.
"You don't easily walk away from a downtown crossroads opportunity."
Nordstrom likely negotiated something key to success there -- an active role in mall management, he added. "I think they'll be very active in keeping an eye on other stores. security, cleanliness, layout. They would have negotiated that going in."
He's visited the new store, and liked it.
"I was impressed. It was a positive experience and they wanted to sell me things," Middleton said. "Compared to Saks, which is cold, impersonal and snobby."
Other American retailers, eager to expand into Canada and assuming a welcoming, if smaller market, have stumbled badly, like Target, which opened 133 stories there in 2013, only to beat a hasty retreat two years later, closing them all.
Writes Toronto Star business reporter David Olive:
A Target struggling with unprecedented problems in its home market failed to do its homework on Canada. It offered prosaic goods available cheaper at Walmart Canada, and was chronically out of stock because of a dysfunctional distribution system. And it over-reached in its first non-U.S. market, starting out with 124 Canadian stores. That included haphazardly retrofitted former Zellers outlets in rundown malls, or hidden behind abandoned warehouses.
“We really consider every retailer to be our competition," McKibbin said. "We welcome competition and think it’s good for everyone, especially the customer. We want to be part of a retail environment that is a compelling place to shop ,and competition only make us work harder to earn our customers’ business.”
"This is a careful, patient company," said Middleton. "Target did everything wrong but Nordstrom have been researching this market for five years."
with additional reporting by Takara Small in Toronto.
