Target Exits Canada For Good -- Less Than Two Years After Launch!
By Kate Musgrove
January 15, 2015Although Target started laying the groundwork for a Canadian presence back in 2011 (by acquiring the leases of 189 Zeller locations from HBC), the first store didn’t open until March 2013. Now, less than two years later, Target has obtained creditor protection and will begin winding down its Canadian businesses. All 133 locations will be closed, although it's not clear at the moment what the closure timeline will be like. While they have stated that "nearly all" employees will receive a minimum of 16 weeks of wages, this is still very sad news for the 17,600 employees.
While it was clear the company was struggling after a bumpy start, the complete and total closure of all stores does come as a surprise to many. New Target locations were opened as recently as a few months ago. Target reports that it considered closing low-performing stores, exiting select provinces, changing distribution and many other corrective options but they were ultimately unable to find a way to reach profitability before the year 2021.
What went wrong? For one, the Canadian launch included over 100 stores -- an absolutely huge number of retail locations to open at once. (By comparison, The Bay has a total of 90 locations in Canada.) Canadian shoppers that enjoyed the US Target experience were frustrated by higher prices, and the Canadian dollar increased from parity with USD at the beginning of 2013 to 93 cents by the end of the same year which only led to greater dissatisfaction in the difference in prices. In the first year, Target lost $1 billion and their losses overall were $1.5 billion and the chain continued to lose money daily.
On December 29, 2014, forum user winner2000 created a poll asking "Will Target say bye bye to Canada in 2015?" You can talk about the closure in that thread -- and, of course, you'll want to stay tuned for liquidation deals.
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