Target to exit Canada

[dmx10101]

Target to exit Canada
January 15, 2015 | By Mike Troy

Just six months after being named chairman and CEO of Target, Brian Cornell is pulling the plug on the retailer’s 133 unit Canadian operation and will incur a $5.4 billion pre-tax loss in the fourth quarter to do so.

Target said it plans to discontinue operating stores in Canada through its indirect wholly-owned subsidiary, Target Canada Co. and that it had filed an application for protection under the Companies’ Creditors Arrangement Act (the “CCAA”) with the Ontario Superior Court of Justice in Toronto.

“After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021,” Cornell said. “Personally, this was a very difficult decision, but it was the right decision for our company. With the full support of Target Corporation’s Board of Directors, we have determined that it is in the best interest of our business and our shareholders to exit the Canadian market and focus on driving growth and building further momentum in our U.S. business.”

Target currently operates 133 stores and employs 17,600 people throughout Canada. The company is seeking court approval to make a voluntary $59 million cash contribution into an employee trust that would allow employees to receive a minimum of 16 weeks compensation.

“The Target Canada team has worked tirelessly to improve the fundamentals, fix operations and build a deeper relationship with our guests. We hoped that these efforts in Canada would lead to a successful holiday season, but we did not see the required step-change in our holiday performance,” said Cornell. “There is no doubt that the next several weeks will be difficult, but we will make every effort to handle our exit in an appropriate and orderly way.”

(This is a developing story with more details to come)

[retailisking]

I had a feeling that Cornell wouldn't wait too long after the holidays to pull the plug. Some will say he gave up too soon, but Target has its own problems at home and a projected six years to turn around a struggling subsidiary is too long to wait. It will be interesting to see what becomes of the store locations in the months and years to come.

[Zayre88]

What a story!!

I was expecting a couple store closures and a plan to try to turn the company around but they decided to just pull the plug right away.

I can't believe the amount of money and effort just thrown away, all the renovations, new equipment, stores, leases, DCs, marketing, offices, staff, IT system, credit card, pharmacy deals and more.... to be written off after only 2 years!

[store215]

Looks like Zellers did a big mistake. Selling all of their stores to Target in 2013, only to close two years later. Looks like Walmart will have a monopoly on discount chains in Canada.

Not really. There are a bunch of smaller discount chains in Canada that we don't have in the U.S. like Canadian Tire being the largest.
(From what I have been told, Walmart is seen as a somewhat 'upscale' store compared to the other Canadian discounters.)

[Zayre88]

Hudson's Bay Co. sold Zellers leases to Target and for them (HBC) it was a pretty good deal because Zellers was slowly dying against the stiff competition of Walmart.

It was surreal to shop at Target tonight and to think that within a few weeks everything will be gone forever!  Unbelievable...  a brand new store that local shoppers started to get used to will be gone with the entire canadian division...

A very sad end...

[HannafordHearts]

I agree that this is sad news to hear, that all these shiny new stores will be empty, abandoned, and forgotten pretty soon.(unless another chain acquires the stores) I think it's safe to say this venture was a failure.

[Zayre88]

Opening soon........  September 17, 2013

[ynkeesfn82]

Sears Canada is offering jobs to Canadian Target employees.

http://globalnews.ca/news/1777927/sears-canada-offering-jobs-discounts-to-target-workers/

Marc's Note: It's a nice gesture that Sears Canada is making, but are they doing any better than their USA counterpart?

[Zayre88]

Sears Canada is offering jobs to Canadian Target employees.

http://globalnews.ca/news/1777927/sears-canada-offering-jobs-discounts-to-target-workers/

Marc's Note: It's a nice gesture that Sears Canada is making, but are they doing any better than their USA counterpart?

Sears Canada is in trouble and may close too...  not sure that former Target employees will want to go there, especially if they lived the Zellers closing and Target closing.

[retailisking]

I wonder if this opportunity will prompt Walmart Canada to reevaluate its go-to-market strategy and consider experimenting with smaller formats like the Neighborhood Markets it operates in the USA. I also wonder if the growing speculation about an impending Canadian recession due to plunging oil prices might have had an impact on Target's decision to cut its losses now.

[Zayre88]

I wonder if this opportunity will prompt Walmart Canada to reevaluate its go-to-market strategy and consider experimenting with smaller formats like the Neighborhood Markets it operates in the USA. I also wonder if the growing speculation about an impending Canadian recession due to plunging oil prices might have had an impact on Target's decision to cut its losses now.

Yeah the outlook in Canada appears to be less appealing with these lower oil prices.

Canada apparently was a good bet when Target made their move but things changed since then.  Target waited too long to come here and when they did, they moved in too big too fast.... with a long waiting period when they created very high expectations (and when Zellers shoppers went elsewhere and competitors got ready)

Walmart Canada will expand even more for sure, not sure about the Neighborhood Markets thing, but they did open smaller stores in former Zellers stores already so we can expect to see that with some former Target stores.

[JimSawhill]

Maybe someone will take a few of those stores and start a small chain called 'Ames' or 'Red Owl'.

[Zayre88]

All Starbucks Coffee in Canadian Target stores are closing for good tonight at 8PM!!

[Retail Fan+ (Justin Hill)]

Maybe someone will take a few of those stores and start a small chain called 'Ames' or 'Red Owl'.

In your dreams.  :D

[retailisking]

Could Zellers make a limited comeback in some closing Target locations? There are a couple Zellers still operating in Canada; currently they function as liquidation centers for HBC.

[Retail Fan+ (Justin Hill)]

They should sell the Canadian Target in the English-speaking provinces to Tesco, and the stores in the Frenc-speaking provinces to Carrefour.

[retailisking]

Both Tesco and Carrefour have tried and failed in North America; they're not about to try again anytime soon.

[Zayre88]

Could Zellers make a limited comeback in some closing Target locations? There are a couple Zellers still operating in Canada; currently they function as liquidation centers for HBC.

I also thought about that... All Target stores are freshly renovated from floor to ceiling, they contain brand new fixtures, HBC could easily bring back Zellers in these stores and this time, all stores would look fresh and modern!

HBC is already in business and knows how to run a discount store chain, they have the distribution network and they know the market and vendors.

For them it would be very easy and personally I feel it would probably work. I'm sure there is still a market out there for larger discount stores at these locations.

Zellers had 273 stores at the time of the sale to Target.  Remember that Zellers kept 64 stores after the sale but later decided to close them anyway becuase they were too scattered and odd sizes.

The Target stores are normally the best sites, and apparently for many Zellers was a beloved brand so it could be an idea to bring the brand back as a smaller 100-store chain

[Retail Fan+ (Justin Hill)]

Both Tesco and Carrefour have tried and failed in North America; they're not about to try again anytime soon.

I forgot about that.

-----------------------

Maybe Meijer can buy a few of the former Target stores in Ontario, including stores in Windsor, London, and in the Toronto suburbs, as well the Target locations in Sault Sainte Marie. Some locations could become Kohl's, while others could become Canadian Tire or Big Lots (only if Big Lots wants to enter Canada). Maybe they could establish a new retail chain altogether to compensate for the loss of Zellers, then Target (Canmart, Canuck's, Mountie Mart, Canadian Discount, etc.).

I call the failiure of Target in Canada "Bullseyegate".

[Pikapower]

Maybe they could establish a new retail chain altogether to compensate for the loss of Zellers, then Target (Canmart, Canuck's, Mountie Mart, Canadian Discount, etc.).

I got name ideas for a new retail chain in Canada

. Canada's Mega Saver Mart
. Canuck Mart
. Magic Mountie Marketplace
. Can-Lo Mart
. Canucky's

[danfifepsu]

why didnt Target give it a chance? and what if I go to a Target in Cananda in March, how much will be left?

[JimSawhill]

Maybe someone will take a few of those stores and start a small chain called 'Ames' or 'Red Owl'.

In your dreams.  :D

I know I'm dreaming...I wish someone would reestablish Ames and Bradlee's. Caldor is back...

[Pikapower]

Maybe someone will take a few of those stores and start a small chain called 'Ames' or 'Red Owl'.

In your dreams.  :D

I know I'm dreaming...I wish someone would reestablish Ames and Bradlee's. Caldor is back...

Or how about bringing back Zellers?

[danfifepsu]

when does the one in Sherbrooke close?

[Zayre88]

Here's the update:

Clearance sales will begin tomorrow, February 5th

By mid May everything and everyone will be gone and anything Target Canada will be history.

But stores are generally expected to close by April with smaller stores possibly closing sooner and shipping remaining inventory to other stores.

[danfifepsu]

Here's the update:

Clearance sales will begin tomorrow, February 5th

By mid May everything and everyone will be gone and anything Target Canada will be history.

But stores are generally expected to close by April with smaller stores possibly closing sooner and shipping remaining inventory to other stores.

what ones will close early, will they all still be there in mid march?

[Zayre88]

Impossible to say at this point.

Remote stores and smaller stores will likely close early.

Fresh and frozen food has stopped being delivered at stores since the announcement.

Apparently 26 stores have stopped receiving shipments altogether.

Others are flooded with any merchandise left at DCs

[danfifepsu]

Impossible to say at this point.

Remote stores and smaller stores will likely close early.

Fresh and frozen food has stopped being delivered at stores since the announcement.

Apparently 26 stores have stopped receiving shipments altogether.

Others are flooded with any merchandise left at DCs

what do you mean remote stores? What of urban stores like Montreal?

[Zayre88]

Impossible to say at this point.

Remote stores and smaller stores will likely close early.

Fresh and frozen food has stopped being delivered at stores since the announcement.

Apparently 26 stores have stopped receiving shipments altogether.

Others are flooded with any merchandise left at DCs

what do you mean remote stores? What of urban stores like Montreal?

a long way away from a major city, in smaller markets, where Target will want to exit quickly

[danfifepsu]

Impossible to say at this point.

Remote stores and smaller stores will likely close early.

Fresh and frozen food has stopped being delivered at stores since the announcement.

Apparently 26 stores have stopped receiving shipments altogether.

Others are flooded with any merchandise left at DCs

what do you mean remote stores? What of urban stores like Montreal?

a long way away from a major city, in smaller markets, where Target will want to exit quickly

what of SHERBROOKE??? Whatll be of that one in a month??? also, this Target and Zellers buy out is like Ames Zayre. and I went to a Zellers once and it was just like Target.