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People pass in front of the Chapters store at Robson and Howe Streets in downtown Vancouver on Monday, Jan. 19, 2015. Indigo Books & Music Inc. annoucned the location will close on June 30.

Jonathan Hayward/The Canadian Press

The flagship Chapters bookstore in downtown Vancouver is closing because it cannot afford rents that are skyrocketing as the Robson Street shopping district shifts east in anticipation of U.S. retailer Nordstrom's entry in the market later this year, experts say.

Canada's largest bookstore chain, Indigo Books & Music Inc., announced on Tuesday that it will shutter its Robson Street location at the end of June and promised to open another store nearby later this year.

James Smerdon, a Vancouver-based retail analyst with Colliers International, said the departure is more indicative of Indigo's inability to compete with the extensive inventory and cheaper prices of Internet rivals such as Amazon than a downturn in a national retail sector recently hit by two high-profile companies abandoning bricks-and-mortar operations.

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"A lot of people might see a retailer like Chapters leaving as a symbol of economic decline and say, 'Oh look, Sony's leaving and Target's leaving,'" Mr. Smerdon said. "But I think that it couldn't be further from the truth, in that when we see what's going to backfill into that space – some of the best retail space in Canada – it's going to be really encouraging."

Business in Vancouver reported on Monday evening that Canadian Tire-owned FGL Sports, which owns the Sport Chek and Atmosphere chain of stores, is scheduled to move in after Chapters.

Any new tenant should be into the space, which rents for hundreds of thousands of dollars a month, by December at the very latest, Mr. Smerdon said.

By that time, the massive makeover of the former Eaton's building across the street will be nearly completed, and high-end anchor tenant Nordstrom should be preparing to move in, which Mr. Smerdon said will be "like a 'good bomb' going off in downtown Vancouver."

Raymond Shoolman, a retail consultant with DIG360, agreed that Chapters's exit from the eastern edge of the Robson district signals the pull of the taste-making Nordstrom, which he predicted would open closer to September.

"Everyone's clamouring to be as close to Nordstrom's as possible," Mr. Shoolman said, adding that yoga-wear giant Lululemon recently moved its Robson store east. "Retail's all about traffic, it's all about people in the area, and the closer you are to a flagship like Nordstrom's everyone wants to be close so they can draw that traffic and compete."

Indigo CEO Heather Reisman said in a news release that the landlord's rent increase "would quite simply make this vibrant, profitable store unprofitable" and that while it waits to move into a new space, it will temporarily move the American Girl specialty boutique now housed in the closing store to its other Vancouver location on Granville Street.

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The boutique selling American Girl dolls, which cost more than $100, is one of only two in Canada. Ten years ago, such products "wouldn't even be found in a bookstore," but large sellers like Indigo are changing into "cultural department stores" that cater to a book-wary public capable of finding anything online, Mr. Smerdon said.

"They obviously recognize that what they're selling is no longer books, but culture, information and lifestyle, more than anything," he added.

Indigo did not say in its release whether the move would lead to layoffs, but stated that it is "working effectively" with its human resources department to "support their employees through this transition."

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