Dive Brief:

• After 35 years in downtown San Francisco, Nordstrom is closing a full-line store there and an off-price Rack store across the street, according to an all-company message from Chief Stores Officer Jamie Nordstrom.

• Those leases won’t be renewed, per the memo, which a spokesperson emailed to Retail Dive. The company is ”working with each impacted employee to support them through this transition and find new roles within the company wherever possible,” Nordstrom said.

• The flagship store at Westfield San Francisco Centre, which has operated since 1988, will close at the end of August, the company said. The Rack store, operating on Market Street since 2014, will close July 1.

Dive Insight:

In his memo, Jamie Nordstrom said the retailer’s stores “continue to play a critical part in delivering our Closer to You strategy, and we continue to be opportunistic about new store locations, relocations and concepts.”

That also includes closures. The company recently decided to shutter its entire fleet in Canada, for example.

When it comes to the two stores slated to close in the Northern California shopping area, Nordstrom noted that “the dynamics of the downtown San Francisco market have changed dramatically over the past several years, impacting customer foot traffic to our stores and our ability to operate successfully.”

The stores are in the city’s downtown shopping district, which has been hit by dramatic shifts in work habits and a decline in tourism. A pandemic-related shift to more remote work led the city’s Budget and Legislative Analyst’s Office in February to estimate that there are now 147,303 fewer office workers downtown each work day, according to a memo prepared for Supervisor Connie Chan. Due to that decline, a fall-off in tourism and other factors pressuring retail, 7,711 retail jobs were lost citywide from 2019 to 2022, according to that report.

“While similar trends have occurred in cities across the country and around the world, the impacts have been higher and longer term in San Francisco due to the concentration of jobs that lend themselves to working remotely and due to the City’s dependence on tourism,” per the report.

Nordstrom will focus on its 16 nearby Nordstrom and Nordstrom Rack locations, as well as online, Jamie Nordstrom said. 

“We also remain committed to the Bay Area market and have made significant investments in our stores there over the past several years,” he said, noting that the company is expanding its off-price fleet nationwide, with 20 new Rack locations planned for this year and more in 2024, he said.

He called attention to a new Rack opening in Pinole, about 20 miles from the downtown stores, and a remodel of Nordstrom full-line store at Westfield’s Valley Fair mall, about 50 miles away.