Why Competitors Must Take Nordstrom Seriously in Canada

On Friday, September 18, Nordstrom opened its first Canadian flagship location. The 230,000 square foot Vancouver CF Pacific Centre store features substantially more luxury brands and amenities than its first two Canadian locations. Experts are now saying that Nordstrom’s heightened luxury experience in Canada could result in a meaningful shift in Vancouver luxury market share to Nordstorm, and we discussed the topic with two of Canada’s top retail experts.

Nordstrom’s flagship brand selection is particularly strong in the categories of women’s ready-to-wear, women’s handbags, and women’s footwear. The store carries an exceptional selection of luxury brands and in some instances, has opened individually branded hard-shops, placing it squarely in competition with nearby Holt Renfrew and to a lesser extent, Hudson’s Bay diagonally across the street. In fact, most luxury brands carried at Nordstrom are also carried at Holt’s and in some instances, Hudson’s Bay’s luxury department The Room. For reference, we recently provided a full list of brands carried at Vancouver’s Nordstrom, as well as a full list of services and amenities (which are also exceptional). 

We discussed Nordstrom’s new flagship with both the President and the CEO of leading retail consultancy HRC Advisory, who both attended last Wednesday’s Vancouver opening gala with a team of their consultants. They described the store as “an incredible addition” to the Canadian retail scene.

 
Antony Karabus, HRC Advisory’s CEO said that he believes this store will quickly become “a real and serious luxury competitor in Vancouver”, pointing out that Nordstrom’s CF Pacific Centre flagship features a meaningful broadening of its focus to include a serious luxury component including key amenities and customer service which will be attractive to luxury shoppers who currently have few comparable alternatives. He noted that the store’s personal shopping suites will be attractive to affluent shoppers, as are services such as a concierge, personal shopping, stylists and delivery services. The coffee shop, restaurant and bar area will also draw a wider variety of shoppers with its bright, upbeat environment and exceptional customer service, signalling a “game changer” for Vancouver’s retail scene. Mr. Karabus concluded by saying that he wouldn’t be surprised if Nordstrom’s Vancouver store became one of the chain’s top locations within a short period of time. 

Farla Efros, President of HRC Advisory, went on to explain how Nordstrom has created a compelling roster of brands at its new Vancouver flagship, and how its lighting, shelving, displays and shops-in-stores creates an appealing environment for a variety of demographics. She expressed how Nordstrom’s gala fashion show provided an introduction to the company’s increased focus on luxury brands, and how the new Vancouver flagship is evidence that Nordstrom is in Canada for the long-term.

In the Vancouver Nordstrom store, handbag shop-in-stores feature brands Céline, Saint Laurent Paris, Valentino, Balenciaga, Delvaux, Burberry, Loewe and Chloé. Other pricey handbag lines include MCM, Jimmy Choo, WANT Les Essentials de la Vie and Stella McCartney. This selection is remarkable and considerably broader than what’s available at Nordstrom’s Calgary and Ottawa stores. Furthermore, Holt Renfrew carries several of these brands, including Valentino, Balenciaga, Burberry, Chloé, MCM and Stella McCartney — with only Burberry featuring an in-Holt’s shop-in-store. Nordstrom’s brand exclusive Delvaux (a luxe Belgian brand) is an exceptional score and it’s remarkable that Holt Renfrew didn’t secure the brand when it had the chance. 

Nordstrom Vancouver’s selection of women’s designer ready-to-wear brands is also exceptional, as is its lineup of six shop-in-stores. Boutiques for Balenciaga, Stella McCartney, Alexander McQueen, Burberry, Céline and Valentino line the perimeter of the store’s upscale Collectors designer department, which also features luxury brands Loewe, Milly, Missoni, Prabal Gurung, Anthony Vaccarello, Carolina Herrera, Carven, Jason Wu, Marc Jacobs, Oscar de la Renta, Proenza Schouler, St. John Knits and Zac Posen. Of the boutiques listed above, all designers are carried at Holt Renfrew and none in shop-in-stores. Holt’s also carries Carven, Marc Jacobs and Oscar de la Renta in its Vancouver store and furthermore, Vancouver’s Hudson’s Bay’s ‘The Room’ features Prabal Gurung, Carven, Jason Wu, and Proenza Schouler. Despite the crossover, Holt Renfrew and Hudson’s Bay carry a variety of top brands not carried at Nordstrom, making one question if Vancouver could soon become oversatured with luxury brands. 

Nordstrom Vancouver’s women’s footwear selection is exceptional, with its Salon Shoes department anchored by a Christian Louboutin boutique — Canada’s second. Holt Renfrew also carries Louboutin and some speculate that it intended to open separate men’s and women’s Louboutin shop-in-stores, as Holts plans to do in its Yorkdale Shopping Centre store in Toronto. Nordstrom also carries top brands including Alexander McQueen, Alexander Wang, Balenciaga, Charlotte Olympia, Fendi, Salvatore Ferragamo, Jimmy Choo, Lanvin, Manolo Blahnik, Miu Miu, Prada and Valentino. Holt Renfrew carries all of these, while Hudson’s Bay’s ‘The Room’ carries Charlotte Olympia in Vancouver. 

Holt Renfrew still carries Vancouver’s broadest selection of luxury brands across all categories, including mainstream staples such as Chanel, Gucci, Prada, Dior, Louis Vuitton, Dolce & Gabbana and others. The 150,000 square foot store is expanding by 40,000 square feet and by the end of 2016, it will be almost as large as Nordstrom, measuring almost 190,000 square feet. Holt Renfrew’s Vancouver location currently sees sales close to $150 million according to sources, and one questions if Holt’s can maintain these sales numbers if Nordstrom Pacific Centre does $200 million+ in annual revenues that some analysts are already predicting. Harry Rosen’s “very strong relationships with generations of luxury male shoppers and the company’s extensive store remodeling investments will likely protect its market share,” according to Mr. Karabus. 

Hudson’s Bay’s The Room also features an exceptional roster of luxury designers, though somewhat less mainstream than that of neighbouring Holt Renfrew. Time will tell how Hudson’s Bay fares in Vancouver in light of increasing competition, particularly given its dated interiors in some departments (and its elevators) and overall lacklustre customer service when compared to Nordstrom and Holt’s.  

Canada’s luxury department store wars will especially heat up next February when Saks Fifth Avenue opens its first Canadian locations in Toronto. Saks’ Canadian locations will carry a wide range of luxury brands and sources already confirm that the Toronto CF Eaton Centre Queen Street flagship will feature brands Lanvin and Givenchy for women, as well as DSquared2 and Isaia for men. A number of vendors, including some of the world’s top brands, have asked us to delay revealing that they’ll be carried at Saks for now, and we’ll respect that request. Saks’ Canadian stores will also provide personal shopping and its Fifth Avenue Club, which it describes as an “intimate shopping service that will provide a personal shopper who will travel to your home or office with merchandise specifically selected for you, including, but not limited to beauty, styling and tailoring”. Saks confirms that it could open as many as two Vancouver-area stores, and sources speculate that both could locate in suburban shopping centres.