As big chains like Nordstrom’s and Bed Bath & Beyond implode, they’re leaving sizable holes in the local retail landscape here in Langley.
Along with the arrival of SkyTrain, that could mean a further change in what we find in local malls, according to Jerry Sheppard, associate professor of business administration at SFU.
“Somebody’s going to snag some of that space for highrises, at some point,” Sheppard predicted.
But it’s not just residential development that can take up suddenly-vacant space at malls.
As some malls have struggled in recent years to retain shoppers, they have also diversified away from simply offering retail stores, Sheppard said.
He points to malls like Surrey Central, which is on the existing SkyTrain route, and how it hosts an SFU campus above the mall.
“I see opportunities for institutions like that,” Sheppard said.
Education institutions, services, government offices, and adding live-in customers by building housing above or near the existing malls are all tactics shopping centres are using, he said.
Sheppard said the recent, sudden shutdowns of the two retail chains, both of which are closing all their Canadian locations, is caused by several factors.
“Nordstrom’s doesn’t exactly surprise me,” he said. “That retail space has always been tough.”
Nordstrom’s tried to position itself as an upscale clothing retailer.
“In the States, Nordstrom’s had a very loyal following that was aware of that upscale positioning.”
But that level of awareness didn’t exist in Canada.
The retailer also used its Nordstrom Rack stores to sell at a discount whatever people didn’t want in the main branches. Having more discount Rack outlets than Nordstrom’s – there were seven Rack’s in Canada, and six main Nordstrom branches – could damage the brand, Sheppard said.
As for Bed Bath & Beyond, the company was close to bankruptcy in the United States, and was facing a summer season – when demand for their bedding products is lower – and decided to cut loose their Canadian arm entirely.
In the long term, the closures shouldn’t be a worry for the Langley business community, said Cory Redekop, CEO of the Greater Langley Chamber of Commerce.
“Nobody wants to see empty storefronts,” he said.
But he said he wasn’t too concerned overall.
With Langley’s growth and the arrival of SkyTrain in five years, malls and shopping areas are growing and the local business community remains strong, he said.
It’s more of a concern for the overall Canadian business ecosystem, he said. The question is whether Canadian regulations are making it too hard for these firms to get a foothold.
It’s not the first time a big American chain has crashed and burned in Canada. Langley was also the home to one of the Target stores when that chain expanded into Canada in 2013. The chain announced it would shut down in January 2015, having made it less than two years.
Canadians who had shopped in the States had a clear idea of what Target would be, Sheppard said. But what they got was “a nicer-looking Walmart with higher prices,” and in Canada, much higher prices. The stores also opened with half-empty shelves in many areas.
“People walk away,” Sheppard said.
The opposite has happened, too. Canada’s Toys R Us chain survived a bankruptcy of its American parent company. All Toys R Us stores in the U.S. closed down by 2018, and the chain now exists south of the border only as sub-stores within Macy’s department stores.
WesGroup Properties, which owns CitySquare and hosted the Bed Bath & Beyond and adjacent Buy Buy Baby, are expecting to replace the stores in a relatively short time.
“We’ve already had a significant amount of interest,” said Derick Fluker, the senior vice president of acquisitions and asset management for WesGroup.
He couldn’t say which stores might replace Bed Bath & Beyond and its sister store Buy Buy Baby, but he believed they would remain two separate units.
Fluker also said that Langley remained one of the strongest retail nodes in the Lower Mainland.
READ MORE: Nordstrom Rack shuts doors in Langley as chain leaves Canada
READ MORE: Bed Bath & Beyond to close in Langley and across Canada
Online retailing through the Nordstrom.ca website was to cease as of March 2 this year, with the stores fully closed up by June.
The closures will result in about 2,500 employees in the Canadian stores losing their jobs.
“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,” Nordstrom said. “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.”
Langley’s Nordstrom Rack had only been in operation for a few years, opening its doors in September 2020.
QuadReal Properties, the owner of Willowbrook Shopping Centre, declined to comment on the future of the Nordstrom Rack space.
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