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Nordstrom’s impending arrival has launched a new era for Canadian department stores. (Gary Malerba/AP)
Nordstrom’s impending arrival has launched a new era for Canadian department stores. (Gary Malerba/AP)

Nordstrom adds Yorkdale outlet to Canadian expansion plans Add to ...

In another sign of a heated Canadian retail scene, U.S. upscale department-store chain Nordstrom Inc. will open a fifth store here – at the high-profile Yorkdale Shopping Centre – in the fall of 2016.

Nordstrom of Seattle said on Monday morning it has reached a deal with landlord Oxford Properties Group to launch a store at Yorkdale, following months of negotiations and various landlords trying to lure the U.S. retailer to their properties.

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Yorkdale is one of Canada’s top performing malls, generating sales per square foot of more than $1,100.

“Yorkdale is clearly a premier fashion destination, home to an impressive mix of retailers and we’re excited to be part of the centre,” Karen McKibbin, president of Nordstrom Canada, said in a statement. “Ever since we announced that we’re coming to Canada, we have been humbled by the response from customers, and we can’t wait to get to work on earning their business.”

Rival landlord Cadillac Fairview Corp. announced last year it will house Nordstrom’s first four stores in Canada, starting in the fall of 2014 in Calgary’s Chinook Centre. The others will be located in Vancouver, Ottawa and suburban Toronto.

Nordstrom’s plans for Yorkdale underlines the stepped up race among major landlords to draw large anchor tenants, reflecting a new era for department stores in Canada.

“International brands and enthusiastic shoppers are flocking to Yorkdale and we’re growing to meet market demands,” Anthony Casalanguida, general m anager of Yorkdale, said. “The new expansion makes it possible for us to continue to provide the very best experience for our shoppers by bringing in the most in-demand retailers from around the world.”

Yorkdale said it will pour $331-million into adding almost 300,000 square feet to its mall. The expansion follows a $220-million and 145,000 square foot development that opened last November 2012, while six more new-to-Canada banners are arriving in 2013 including AllSaints, David Yurman, John Varvtos, Mulberry, White House Black Market and Zara Home.

The Yorkdale expansion for Nordstrom will be at the south end of the complex, next to the corridor where Silver City Theatres are located, a spokeswoman said. The parking decks that are currently in the southernmost part of Yorkdale will be demolished and replaced by the new expansion.

Developers led by Cadillac Fairview and Oxford have been wooing potentially lucrative department-store retailers, including Nordstrom, Toronto-based Holt Renfrew & Co. and Quebec-based La Maison Simons, which generate above-average industry sales. In other negotiations, Oxford is in talks to entice high-end Holt Renfrew to its fast-growing Square One Shopping Centre in Mississauga, which would result in Cadillac’s Sherway Gardens in Toronto losing Holts although it is picking up Nordstrom, industry sources have said.

Cadillac, which signed on this country’s first four Nordstrom stores, is discussing bringing Simons to its Rideau Centre in Ottawa following that retailer’s splashy launch in West Edmonton Mall last fall, its first foray outside of Quebec.

The flurry of activity is in stark contrast to five years ago, when landlords virtually had given up on department stores as vital anchor tenants. They got financial breaks from malls in return for attracting shoppers, but incumbents the Bay and Sears failed to draw big crowds.

The dynamics started to change in 2011 after U.S. Target Corp. said it was coming to Canada this month, triggering a race among other U.S. retailers to find store sites here. The dearth of prime retail space led to the current jostling among mall owners, which are now betting on the star power of department stores to help bolster business.

Today, Hudson’s Bay Co. is showing signs of a revival under U.S. owner Richard Baker, a real estate specialist who engineered Target’s arrival to Canada by selling most of HBC’s Zellers’ leases to the American discounter.

In the mall sweepstakes, Cadillac so far has been a big winner, having snagged Nordstrom last year for four of its centres, with openings starting in 2014. The deal came together after Cadillac sealed a $170-million agreement with struggling Sears to sell back four of its leases to the landlord.

Now Oxford is looking to raise its anchor-tenant profile, with the latest deal with Nordstrom and t alks underway with Holts,and Simons, sources have said.

Follow on Twitter: @MarinaStrauss

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