Nordstrom Canada to capitalize on expanding luxury market

Last year, Harry Rosen Inc. began building its war chest. CEO Larry Rosen unveiled a five-year $100-million strategy to open new stores, expand existing ones, invest in e-commerce and double the amount spent on training. The plan was put in place for events like Thursday's, when it will be announced that high-end retail giant Nordstroms is coming to town.

At stake is the luxury-goods market, part of a $250-billion industry expected to increase by 7 per cent in North America over the next two years, according to Bain & Company.

Capitalizing on this upswing is now a global pursuit, with premium retailers solidifying their home fronts and reaching abroad to secure new markets.

It's that trend that's driving Nordstrom's plans to expand into Canada within the next three years. It's first four stores will be located in:

• Toronto's Sherway Gardens

• Calgary's Chinook Centre

• Pacific Centre in Vancouver

• Rideau Centre in Ottawa

In Calgary, Ottawa and Vancouver, Nordstrom's will be moving into space vacated by Sears Canada, which recently sold its leases back to mall owner Cadillac Fairview for $170-million.

The move is just the latest in a series of cross-border salvos launched by U.S. chains of late. As everyone knows, Target aims to open 125 stores in Canada next year, many of which will do battle against the 200 stores Walmart has on the books.

J. Crew also came north last year; first with a store in Toronto's Yorkdale mall. Another Toronto location is currently under construction at downtown tourist hotspot, the Eaton Centre, with two more stores slated to open in Vancouver and Edmonton.

Ann Taylor, a favourite of Michelle Obama and Kate Hudson, will open the first of two Canadian stores in October.

Ann Taylor's second store will be in Yorkdale, home to Harry Rosen and Holt Renfrew, the two Canadian chains with the most to lose from the Nordstrom news. As much as J.Crew and Ann Taylor may erode the market of the two local titans, it's Nordstrom, with its US$9-billion in annual sales and network of 200 U.S. stores that threatens to most disrupt the high-end scene.

Echoing Harry Rosen's moves, Holt Renfrew is now on a rapid expansion campaign, increasing its square footage in Canada by 40 per cent over the next three years. The plans include doubling the size of its Yorkdale store and adding a men's section with its own separate entrance.

Not yet announced, though surely in the works for a Holts will be a renewed emphasis on customer service, a $2-million item now in the training budget for staff at Harry Rosen, where keeping track of the styles, birthdays and children's names of key clients is de rigueur. It's here where competition will be fiercest with Nordstrom, a retailer renowned for championing customer service, hiring staff specifically for that skill.