Nordstrom will open its doors at Toronto’s Eaton Centre Friday, and even with growing concern over Canadian household debt reaching a record high, the CEO of Cadillac Fairview – the Canadian company that owns the mall – says he isn’t worried.

“Nordstrom is an amazing anchor from the perspective of driving traffic,” John Sullivan, president and CEO of Cadillac Fairview, told BNN’s Paige Ellis in an interview. “They opened a store in our mall in Vancouver in the Pacific Centre last fall and traffic is up 30 per cent in that mall. That’s an unheard of statistic.”

The U.S. retail giant is just one of the big anchors for Cadillac Fairview. The company is also a landlord to Apple, which launches its new iPhone 7 smartphones tomorrow, and Saks Fifth Avenue.  

Nordstrom’s opening of its flagship Toronto location comes amid fears that rising household debt has become risky for the country’s economy. Statistics Canada data revealed Thursday that Canadian household debt hit a record high in the second quarter, with the ratio of household debt to disposable income rising to 169.85 per cent from 167.37 per cent in the previous quarter. That means Canadians had nearly $1.70 of debt for every dollar of disposable income.

So if consumers do pull back, how will Cadillac Fairview’s malls keep up sales and new stores like Nordstrom out of the retail graveyard that so many other companies have fallen victim to?

“Clearly, what ultimately drives our success is sales. And sales are driven by consumers. So it’s obviously something we’re cognizant of, and will keep an eye on,” Sullivan said. “But I don’t think you can talk about household debt without talking about housing values— because most of that debt is in fact mortgages against homes. And our market has been extremely healthy for a long, long time.”

In Toronto, home sales have continued to climb. The average home price rose 17.7 per cent to $710,410 last month, according to the Toronto Real Estate Board. But sales in Vancouver, the country’s other hot market, have started to slow since a 15-per-cent tax on foreign homebuyers came into effect last month.  

Still, Sullivan said Cadillac Fairview is “not directly exposed to the housing market” in Vancouver where the company owns two malls – the Pacific Centre and the Richmond Centre.

“So in my view, as long as housing values hold up I don’t really think that’s an issue,” Sullivan said. “If housing values take a deep dive, that would have a fall on effect not just on consumer sales but on a lot of things. But I don’t think given the climate we’re in right now with interest rates…I really don’t see it being that big of a deal.”

Struggling retailers in Canada over the past two years:

  • Danier Leather to close 76 stores
  • New-York based teen store Aeropstale will close all 41 Canadian locations
  • Montreal-based Parasuco closed all seven brick-and-mortar locations in Canada
  • Mexx liquidated 95 stores in February
  • Womenswear retailer Costa Blanca closed all Canadian locations
  • Holt Renfrew closed its Ottawa and Quebec City locations
  • Future Shop closed all Canadian locations
  • Telus closed all 59 Black’s photography locations
  • Gap plans to close 175 North American locations by end of 2016. The confirmed number for Canadian stores has not been released.
  • Reitmans to close all 107 Smart Set locations
  • Bombay, Bowring & Co. and Benix & Co said it would close all 110 stores
  • Jacob closed all 92 locations
  • Sony Corp. to close all 14 Canadian locations
  • Nine West Canada filed for bankruptcy protection and has closed at least one store