The liquidation sales at Nordstrom stores across Canada will begin Tuesday.
Russia announced Friday that it will cut oil production by 500,000 barrels per day next month after western countries capped the price of its crude over its action in Ukraine.
“As of today, we fully sell all our crude output, but as we stated before, we will not sell oil to those who directly or indirectly adhere to the `price ceiling,’” Deputy Prime Minister Alexander Novak said in remarks carried by Russian news agencies.
“In connection with that, Russia will voluntarily cut production by 500,000 barrels a day. It will help restore market-style relations,” he said.
Analysts have said one possible Russian response to the cap would be to slash production to try to raise oil prices, which could eventually flow through to higher gasoline prices at the pump as less oil makes it to the global market.
International benchmark Brent crude rose 2.2 per cent Friday, to US$86.42 per barrel.
The Group of Seven major democracies have imposed a US$60-per-barrel price cap on Russian oil shipped to non-western countries. The goal is to keep oil flowing to the world to prevent price spikes that were seen last year, while limiting Russia’s financial gains that can be used to pay for its campaign against Ukraine.
The cap is enforced by barring western companies that largely control shipping and insurance services from moving oil priced above the limit.
Russia has said it will not sell oil to countries observing the cap, a moot point because Russian oil has been trading below the price ceiling recently. However, the cap, an accompanying European Union embargo on most Russian oil and lower demand for crude have meant that customers in India, Turkey and China have been able to push for substantial discounts on Russian oil.
The impact of a cut of 500,000 barrels per day is an open question as a slowing global economy reduces the thirst for oil.
The OPEC+ alliance of oil producers, which includes Russia, tried to boost oil prices with an October announcement that it would cut production by 2 million barrels per day, only to see prices fall below $80 per barrel by December.
Asked if Russia consulted OPEC+ members about Moscow’s new production cut, Kremlin spokesman Dmitry Peskov said “there had been conversations with some members of the OPEC+” before the move was announced. He didn’t offer any details.
But Novak insisted in a statement later that Moscow made the move without consulting anyone.
“It’s a voluntary cut; there have been no consultations with anyone regarding it,” the deputy prime minister said, according to the Russian media.
The new reduction could be “an early sign that Russia might try to weaponize oil supplies after last year’s failed attempt to weaponize natural gas,” said Simone Tagliapietra, an energy policy expert at the Bruegel think tank in Brussels.
But that could be difficult to accomplish because it’s easier to find alternative supplies of oil, traded through tankers that crisscross the globe, than to replace natural gas, which before the war mostly came by pipeline.
Russian exporter Gazprom has cut off most supplies of natural gas to Europe, citing technical issues and refusal by some customers to pay in Russian currency. European officials call it retaliation for supporting Ukraine.
Europe did suffer from resulting high natural gas prices but has managed to replace much of the lost Russian supply from other sources including shipborne liquefied gas from the U.S. and Qatar. Natural gas prices have since come down from all-time highs last summer but are still three times higher than before Russia massed troops on the Ukraine border.
Nordstrom is expected to begin liquidating its stores across Canada today.
The start of the department store chain’s closing sale comes a day after the U.S. retailer’s Canadian branch got permission from the Ontario Superior Court of Justice to start selling off merchandise.
Nordstrom’s liquidation efforts are being led by Hilco Merchant Retail Solutions ULC and Gordon Brothers Canada and are expected to be complete by late June.
Furniture, fixtures and equipment will be liquidated alongside most of Nordstrom’s merchandise, but goods from third parties aren’t part of the sale because they were removed from stores over the weekend.
Nordstrom required court approval to liquidate because it is winding down its Canadian operations under the Companies’ Creditors Arrangement Act, which helps insolvent businesses restructure or end operations in an orderly fashion.
As part of the wind down, Nordstrom will close its six Canadian department store locations and seven Nordstrom Rack shops, which sell designer goods at discount prices.
This report by The Canadian Press was first published March 21, 2023.
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The upscale department store chain has a store at the Rideau Centre mall as well as a Nordstrom Rack location at the Ottawa Train Yards shopping centre
The liquidation sales at Nordstrom stores across Canada will begin Tuesday.
A spokesperson for Nordstrom confirmed the impending sales period Monday in an email to The Canadian Press, just after the Ontario Superior Court of Justice gave the U.S. retailer’s Canadian branch permission to start selling off its merchandise.
The upscale department store chain that primarily sells designer apparel, shoes and accessories has six Canadian stores and seven discount Nordstrom Rack locations, including its Rideau Centre location and a Nordstrom Rack at the Ottawa Train Yards shopping centre, which sells merchandise at discounted prices.
When Nordstrom announced the move in early March, it said it expected the Canadian stores to close by late June and 2,500 workers to lose their jobs.
The company initiated the exit from the market because chief executive Erik Nordstrom said, “despite our best efforts, we do not see a realistic path to profitability for the Canadian business.”
Nordstrom opened its first Canadian store in Calgary in 2014, followed by the Ottawa store at the Rideau Centre, which occupied the second and third levels of a former Sears location.
The Rideau Centre store has an alterations and tailoring shop and an energy drinks bar. Merchandise ranges from brand name to designer apparel, housewares, furnishings and beauty products, including brands such as Geox shoes, Gucci, Adidas and Adidas by Stella McCartney.
Later on came Nordstrom Rack, which made its Canadian debut in 2018 at Vaughan Mills, a mall north of Toronto. At the time, Nordstrom said as many as 15 more Rack locations could follow.
Nordstrom promised each Rack store would deliver savings of up to 70 per cent on apparel, accessories, home, beauty and travel items from 38 of the top 50 brands sold in its Canadian department stores.
Nordstrom had trouble with profitability because of its selection of products and the COVID-19 pandemic, said Tamara Szames, executive director and industry adviser of Canadian retail at the NPD Group research firm, a day after Nordstrom announced its exit.
“You would hear a lot of Canadian saying that the assortment wasn’t the same in Canada that it was in the U.S.,” she said.
She noticed Nordstrom started to shift its product mix away from some luxury brands around 2018 and saw it as a sign that the retailer was struggling to maintain its original vision and integrity.
The pandemic made matters worse because many stores were forced to temporarily close their doors to quell the virus and shoppers were less likely to need some of the items Nordstrom sells like dressy apparel because events had been cancelled.
Despite stores reopening and many sectors rebounding, Szames said the apparel business is the only industry NPD Group tracks that has yet to recover from the health crisis.
“The consumer has really been holding back in terms of spendâ¦within that industry.”
At a hearing at Osgoode Hall in Toronto, lawyer Jeremy Dacks, who represented Nordstrom, said the company has “worked hard to achieve a consensual path forward” with landlords, suppliers and a court-appointed monitor to find an orderly way to wind down the business.
The monitor, Alvarez & Marsal Canada, suggested five potential third-party liquidators and Nordstrom was approached by another five. The company decided to go with a joint venture comprised of Hilco Merchant Retail Solutions ULC and Gordon Brothers Canada, which were involved in the liquidation of Target, Sears and Forever 21 in Canada, Dacks said.
They will oversee the sale of merchandise, furniture, fixtures and equipment, but not goods from third parties, which removed products this past weekend, Dacks said. He added that all sales will be final and no returns will be allowed.
Lawyers for Nordstrom landlords Cadillac Fairview, Ivanhoe Cambridge, Oxford Properties Ltd. and First Capital Realty testified Monday that they were pleased with how “smoothly” and “organized” the process has gone so far.
In approving Dacks’ liquidation request, Chief Justice Geoffrey Morawetz agreed, saying Nordstrom is facing a “difficult time, but this process is unfolding in a very cooperative manner.”
Nordstrom required court approval to begin the liquidation because it is winding down its Canadian operations under the Companies’ Creditors Arrangement Act, which helps insolvent businesses restructure or end operations in an orderly fashion.
With files from Joanne Laucius
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