Nordstrom will close all 13 of its Canadian locations, the retailer announced on Thursday, in an attempt to streamline the business and bolster profits.
"This will enable us to simplify our operations and further increase our focus on driving long-term profitable growth in our core U.S. business," said Nordstrom CEO Erik Nordstrom.
The closures will affect the company's six Nordstrom and seven Nordstrom Rack locations, as well as Nordstrom.ca. All 2,500 Canadian employees are expected to be laid off.
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On Thursday, the American luxury department store chain obtained an Initial Order from the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act to move the closures along swiftly, and will employ the use of a third-party liquidator.
"We regularly review every aspect of our business to make sure that we are set up for success," Nordstrom said. "We entered Canada in 2014 with a plan to build and sustain a long-term business there. Despite our best efforts, we do not see a realistic path to profitability for the Canadian business. We want to thank our team for their performance and dedication in serving customers in Canada. This decision will simplify our structure, intensify focus on our growth and profitability goals and position us to create greater value for our shareholders."
The closure of the Canadian stores is expected to result in a $400M decline in total company net sales, but a $35M improvement in total company EBIT.
