Nordstrom closing all Canadian stores, no ‘realistic path to profitability’

Thousands of jobs are on the chopping block at Nordstrom after the retail giant announced that it’s shuttering its business operations in Canada.

In its fourth-quarter earnings release on March 2, the company said it intends to close its six Nordstrom stores and seven Nordstrom Rack stores with the help of a third-party liquidator.

“We entered Canada in 2014 with a plan to build and sustain a long-term business there,” CEO Erik Nordstrom said in the release.

“Despite our best efforts, we do not see a realistic path to profitability for the Canadian business.”

Nordstrom added that it has obtained an initial order from the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act (CCAA) to facilitate the wind-down.

The retail giant expects to close all of its stores by late June. The company’s e-commerce platform is ceasing operations as of March 2.

Nordstrom claims in the release that it employs a Canadian workforce of approximately 2,500 people.

Major layoffs continue

Nordstrom’s decision to discontinue its business operations in Canada comes amid a flurry of layoffs to kick off 2023.

Several big names, including Alphabet, Zoom, Hudson’s Bay, Dell, Microsoft, Amazon, and Salesforce, are significantly scaling back their staffing levels as they continue to monitor market conditions.

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Severance pay for Nordstrom Canada employees

Since Nordstrom obtained an order for creditor protection under the CCAA, the retail giant doesn’t have to provide non-unionized employees in Canada with the full severance package that they would have been entitled to if the company didn’t declare bankruptcy.

Bankruptcy laws in the country allow companies to favour secured creditors (i.e. banks) over unsecured creditors (employees). As a result, non-unionized workers at Nordstrom Canada will likely receive little to no severance pay. 

A complete severance package can be as much as 24 months’ pay, depending on a variety of factors.

WATCH: Employment lawyer Lior Samfiru explains everything you need to know about severance pay on an episode of the Employment Law Show.

In this situation, compensation for employees at the retail giant will likely be “pennies on the dollar.”

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Severance when bankruptcy isn’t declared

If Nordstrom didn’t declare bankruptcy, non-unionized employees and senior executives in Canada would be entitled to full severance pay when they lose their job due to downsizing or corporate restructuring.

This includes individuals working full-time, part-time, or hourly in Ontario, Alberta, and B.C.

To figure out how much compensation you could be entitled to, use our firm’s free Severance Pay Calculator.

LEARN MORE
• Severance packages in mass layoffs
• Rights to severance for provincially regulated employees
• Severance pay in a recession 

Received a severance offer? Speak with an employment lawyer

Before you accept any severance offer, have an experienced employment lawyer at Samfiru Tumarkin LLP review it and your employment contract.

We can tell you if what you have been provided is fair and how to get proper compensation if it falls short of what you are actually owed.

If you aren’t given the full amount, which happens often, you have been wrongfully dismissed and are entitled to compensation.