Nordstrom Closes San Francisco Stores as Foot Traffic Falls

Nordstrom is reportedly shuttering two of its San Francisco stores amid declining foot traffic.

That’s according to a Wednesday (May 3) Wall Street Journal report, which cites a number of factors for the closing, including worries about crime and the persistence of remote work keeping potential shoppers away from cities.

“Downtown America has been particularly hard hit by this combination of higher interest rates and working from home,” Torsten Slok, chief economist at Apollo Global Management in New York, told the WSJ.

PYMNTS has contacted Nordstrom for comment but has not yet gotten a reply.

The stores in question are its Market Street Nordstrom Rack location, which will close down July 1, and the company’s mall department store at Westfield San Francisco Centre, which is set to shut down at the end of August.

Nordstrom has had a presence in San Francisco for 35 years and said changing market conditions that impacted foot traffic factored into its decision, the WSJ said.

“We can better serve our customers there by focusing on our 16 nearby Nordstrom and Nordstrom Rack locations, as well as online,” a representative for the retailer said.

The Westfield mall’s owner, Unibail-Rodamco-Westfield, told the WSJ it has expressed concerns with city leaders about problems that include what it called rampant crime.

As PYMNTS has reported, San Francisco is one of the city’s most targeted by organized retail theft groups, per the National Retail Federation.

“Organized retail crime has been a major concern for the retail industry for decades, endangering store employees and customers, disrupting store operations and inflicting billions in financial loss for retailers and the communities they serve,” NRF President and CEO Matthew Shay said last month.

“These concerns have grown in recent years, as criminal groups have become more brazen and violent in their tactics and are using new channels to resell stolen goods.”

The news comes weeks after Nordstrom announced it was launching nine new stores for Nordstrom Rack, its off-price retail concept, which offers clothing, accessories, home décor and beauty products at markdowns of up to 70% off the original retail price.

“The move is an interesting one as the retailer is known for its high-end products and customer service, which were bolstered by its investments in tools and technologies like virtual style boards and online styling appointments,” PYMNTS wrote last month.

“Those investments yielded positive results, with digital customers spending five times more than the typical Nordstrom shopper.”

But with this latest shift, the company could be “looking to become the go-to destination for discount pricing instead of luxury and service,” PYMNTS posited.