The head of U.S. luxury department store giant Nordstrom says brick-and-mortar retailers are not going anywhere as the chain gears up to open its first discount store in Canada this week.

Blake Nordstrom, co-president of Nordstrom, told BNN in an interview on Tuesday that he welcomes competition in Canada’s changing retail environment as big retailers like Sears close shop.

“Some people in the very extreme are like, 'Malls are going away, brick and mortar is going away.' We don’t think that’s the case,” he said.

“There are some malls and stores going by the wayside. Five of our six full-line stores are in Sears locations and for many years, Sears Canada and Sears U.S. were very dominant, but that changed and it gave us an opportunity,” he added.

Nordstrom’s comments come as the retailer gets set to open its first discount Rack store in Canada on Thursday after three years of delays. It had originally planned to launch the Rack store north of Toronto in Vaughan Mills mall a year after it opened the first original department store in 2014.

Nordstrom said the company had underestimated the technological challenges it faced when it arrived in Canada.

“We had customers really excited about having the Rack and it’s an important part of our formula to be able to support our full-line stores to once an item is not selling or it's end of the season to get it out quickly and get it into our Rack, so we can move it on. But, we didn’t have the systems necessary to manage the business properly,” he said.

The Rack store is the first of six more the company plans to open in Canada - in addition to the six original department stores already operating.

NOT PROFITABLE THIS YEAR

Nordstrom said its investment in the six original department stores in Canada makes it unlikely that its Canadian unit will be profitable this year.

“I don’t think we’ll get there this year – we’re very close,” Nordstrom said. “It was a big commitment and investment to open those six full-line stores.” 

Nordstrom also admitted that its operations in Canada are not able to “fully service the customer” since it has no online shopping.

“We don’t have that functionality and capability in Canada,” he said. “The digital component is limited at this point.”

“We have plans to do that, we don’t have specifics yet, but it is true we’re opening the store without that full capability,” he added.