In a shocking move, Nordstrom (JWN-N) has announced it will wind down its Canadian operations, closing 13 Nordstrom and Nordstrom Rack stores. At least 2,500 people will be laid off as a result, according to a statement from Nordstrom's fourth-quarter earnings report.

More devastating is that the company will also shut down its e-commerce platform effective immediately, March 2, a move that could compromise the earnings of several Black entrepreneurs and other business owners with product lines available through its website.

“We took decisive actions to right-size our inventory as we entered the new year, positioning us for greater agility amidst continuing macroeconomic uncertainty. We also made the difficult decision to wind down operations in our Canadian business. This will enable us to simplify our operations and further increase our focus on driving long-term profitable growth in our core U.S. business," Erik Nordstrom, chief executive officer of Nordstrom Inc., said in a statement.

“As we enter fiscal 2023, we are focused on enhancing the customer experience, improving Nordstrom Rack performance, increasing inventory productivity and continuing to advance our supply chain optimization initiatives. We remain confident in the strength of our brands and our ability to drive profitable growth and deliver long-term value to our shareholders,” he added.

The company says the move will cost the chain $400 million in total company net sales but was necessary to ensure Nordstrom finishes strong this year. A statement reads that Nordstrom filed for creditor protection and in-store closings will be complete by late June.

According to the company’s fourth-quarter earnings report, net sales dropped by 4.1 per cent and gross merchandise value declined by 4.2 per cent. Moreover, net sales for Nordstrom Rack decreased 8.1 per cent and digital sales fell by 13.1 per cent.

The company entered the Canadian market in 2014 and is the latest international retail chain to leave Canada after less than a decade. Target shuttered its Canadian operations in less than three years.

As more consumers move away from brick and mortars store and more people shop online on sites like Amazon for clothing and other retail goods, the Canadian retail market has taken a hit.

A report released by Statistics Canada last September suggests that sales were down in nine of 11 subsectors, representing 94.5 per cent of retail trade in July 2022. The decrease was driven by lower sales at gasoline stations and clothing and clothing accessory stores.

“We regularly review every aspect of our business to make sure that we are set up for success,” Nordstrom said in a statement. “We entered Canada in 2014 with a plan to build and sustain a long-term business there. Despite our best efforts, we do not see a realistic path to profitability for the Canadian business. We want to thank our team for their performance and dedication in serving customers in Canada. This decision will simplify our structure, intensify focus on our growth and profitability goals and position us to create greater value for our shareholders.”

More to come on this breaking news story.