“The dynamics of the downtown San Francisco market have changed dramatically over the past several years, impacting customer foot traffic to our stores and our ability to operate successfully,” Jamie Nordstrom, chief stores officer, wrote in letter to employees Tuesday.

The company will vacate more than 300,000 square feet (28,000 square meters) of space at Westfield San Francisco Centre on Market Street, a shopping and tourist area in the heart of downtown. It also plans to close a nearby Nordstrom Rack. 

In the past few weeks alone, retailers including Office Depot and Anthropologie have both said they would shut their Market Street-adjacent locations. The closure of a nearby Whole Foods has been another flash point for San Francisco after the grocer cited safety concerns as a reason for leaving.

The retail departures are the latest gut punch to a city that’s already grappling with the tech industry downturn and the crises engulfing Silicon Valley Bank and First Republic Bank, two of the region’s most prominent financial institutions. Office workers have been slow to return and companies including Salesforce Inc. and Meta Platforms Inc. are ditching office space, hurting small businesses in the area struggling to survive. City officials have forecast a $780 million deficit in the next two fiscal years. 

San Francisco’s homelessness crisis and public safety concerns also are concentrated in downtown, leading to spasms of highly publicized retail theft and outcry from retailers that the city isn’t doing enough.

“The planned closure of Nordstrom underscores the deteriorating situation in downtown San Francisco,” the Westfield mall’s owner, Unibail-Rodamco-Westfield, said in a statement. “A growing number of retailers and businesses are leaving the area due to the unsafe conditions for customers, retailers, and employees, coupled with the fact that these significant issues are preventing an economic recovery of the area.”

City Response 

Mayor London Breed’s office said in a statement that she sought to assuage security concerns by bolstering law enforcement presence, including having two San Francisco Police Department officers inside the mall every day. 

She also said that the Nordstrom location was a subject of concern before San Francisco’s latest economic downtown. Nordstrom closed another location in San Francisco’s Stonestown Galleria in 2019. Meanwhile, Paris-based Unibail-Rodamco-Westfield is trying to leave to leave the US market entirely. 

“Westfield came to us a number of years ago with concerns about the long-term viability of this location for Nordstrom,” Breed’s office said. “The city has been eager to get a concrete plan from them that we could explore, however, they never brought us anything for review.” 

The San Francisco Business Times reported Nordstrom’s planned departure earlier Tuesday. In its letter to employees, the company said it instead will focus on its 16 other locations in the Bay Area and its online sales. 

California state senator Scott Wiener tweeted that the closing was “horrible & tragic” but underscored the need to re-imagine downtown San Francisco and address public safety concerns. 

“Current conditions are untenable for SF’s future success,” Wiener said.