Prada concession at Nordstorm, Mall of America, Minneapolis. Photo via Prada Group 2012 Annual Report Presentation.

In line with this week's theme of shop-in-store concessions, we've been told that Nordstrom is looking to possibly feature Prada and other concessions within some of its Canadian locations. Nordstrom has become more receptive to the concept of in-store concessions (designer-operated shops within a larger store), evident by the increase in boutiques for Gucci, Chanel and Dior within existing Nordstrom stores. Saks Fifth Avenue and Holt Renfrew will have to compete for these concessions as Nordstrom attempts to secure luxury designers for its Canadian stores, especially for its Toronto and Vancouver flagship locations.

Prada concession in women's designer handbags at Nordstrom, Broadway Plaza, Walnut Creek, California [Image Source]

In the past, Nordstrom stores generally lacked designer shop-in-stores. Nordstrom's first luxury concession was the 1992 opening of Chanel at its Seattle flagship. Nordstrom secured Chanel following the bankruptcy of the neighbouring Fredrick & Nelson department store, which included Chanel and many other upscale shops-in-store. It has only been over the past eight years that Nordstrom has become increasingly receptive to concessions and in-store designer shops, led by the October, 2006 opening of Nordstrom Topanga Plaza in Canoga Park, California. At the time, Topanga was the most luxurious Nordstrom store in the chain. It featured Chanel and Dior accessories concessions and in addition, Nordstrom's first Gucci boutique. Gucci shops have since become common at Nordstrom.

Chanel at Nordstrom in Downtown Seattle. Saks and Nordstrom will compete for similar concessions in Canada [Image Source]

Prada currently has four leased concessions within Nordstrom stores (in Downtown Seattle, Minneapolis (Mall of America), Walnut Creek, California (Broadway Plaza) and San Diego (Fashion Valley). Chanel boutiques are located within six Nordstrom stores. The king of concessions, Louis Vuitton, operates one concession at Nordstrom's Chicago Michigan Avenue store and according to a representative at Nordstrom, Louis Vuitton won't be opening further concessions within any American (or Canadian) Nordstrom stores.

Currently, Holt Renfrew is the only Canadian store to house concessions for Prada, Gucci and Chanel in Canada. We've been told that Saks Fifth Avenue would like all three of these at its new Toronto Eaton Centre flagship, and it may attempt to secure Gucci and possibly Chanel concessions for its Sherway Gardens Saks store. As Nordstrom will also open at both the Toronto Eaton Centre and Sherway Gardens, a luxury concession war may emerge as we see an unprecedented number of upscale department stores expand into Canada.

Besides concessions, Nordstrom will be looking to secure plenty of upscale menswear and womenswear designers for its Canadian stores, designers also carried at Holt Renfrew, Saks Fifth Avenue and The Room at Hudson's Bay. We see a potential label war amongst these retailers as they expand in Canada, and we'll dedicate a separate article to this topic.

[Nordstrom website]