Macy's Won't Come to Canada, Despite Recent Press [With Video]

  Photo:  Patricksmercy , Flickr

Photo: Patricksmercy, Flickr

The founder of a prominent commercial real estate company says that Macy's is likely coming to Canada, and that Nordstrom could open in downtown Edmonton. This gained considerable media attention and as a result, we received numerous emails and phone calls. The following is our comment and analysis, including a video clip from CTV news featuring Retail Insider's Editor-in-Chief, Craig Patterson. 

On Wednesday morning, Chuck Clubine, founding partner of Edmonton-based The Trikon Group, appeared on CTV Morning Live. During that broadcast, Mr. Clubine revealed that he believes Macy's will open its first Canadian store at West Edmonton Mall, and that Nordstrom would open in downtown Edmonton. Specifically, he said that he had heard from "pretty good sources" that "luxury retailer" Macy's would open in West Edmonton Mall, in an expansion wing beside the mall's popular World Waterpark. Mr. Clubine then went on to say that Nordstrom could open in downtown Edmonton, either in the new Arena District, or in the retail podium of the new Kelly Ramsey Building

   Click this image  to watch the entire CTV news story, including Craig Patterson's comments. 

Click this image to watch the entire CTV news story, including Craig Patterson's comments. 

Last month, West Edmonton Mall owner David Ghermezian told the Edmonton Journal that the mall is planning an expansion wing that will extend from entrance 50 southward towards 87th Avenue. Mr. Ghermezian said that he wants a luxury department store to anchor this expansion and as far as we're aware, no anchor tenant has signed a lease for this proposed space. 

Last year, Macy's CEO Terry J. Lundgren said that Macy's didn't have plans to open in Canada. Following Mr. Clubine's comments on Wednesday, Macy's told CTV news that it has no plans to open in Canada, and that "Canada is not part of our thought process". This shouldn't come as a surprise - Canadian department store Hudson's Bay is considered to be quite similar to Macy's, serving the Canadian market with about 90 stores. Macy's would face considerable competition from Hudson's Bay, and the Canadian retailer has significant advantages including established distribution networks, exceptional store locations, and agreements with many of the same brands carried at Macy's. Macy's would also face an uphill battle securing appropriate Canadian retail space - even if it were to buy Sears Canada, for example, most of Sears' best stores have already been divested. Watching the challenges and resultant losses experienced by Target's entry into Canada, Macy's may be best to hold off on any potential Canadian expansion plans.

  Edmonton's Arena District will feature some retail, though likely not enough to attract Nordstrom. Photo: Edmonton Journal.

Edmonton's Arena District will feature some retail, though likely not enough to attract Nordstrom. Photo: Edmonton Journal.

Mr. Clubine's assertion that Nordstrom could open in downtown Edmonton is generally misguided. His speculation that Nordstrom could locate in the city's Arena District is an interesting theory, especially as its retail component is expected to only occupy approximately 215,000 square feet. Given that even a smaller Nordstrom location would measure at least 125,000 square feet, there would be little room for the necessary complimentary tenant mix to warrant Nordstrom locating downtown. Not to mention, pedestrian traffic downtown is limited and despite redevelopment efforts in Edmonton's core, Nordstrom is likely to choose a successful suburban shopping centre when it enters the Edmonton market. 

Today's Retail News From Around The Web: November 7, 2014