The outside of a Target store next to Willowbrook Mall in Langley

Target to close all stores in Canada, including 19 in B.C.

U.S. retailer says profits too far away to continue, Canadian subsidiary files for creditor protection

U.S. retailer Target is abandoning its short-lived foray into Canada.

The company says it will close all 133 Canadian stores, including 19 in B.C.. It employs 17,600 people in Canada and the closures could throw thousands out of work in this province.

Target chairman CEO Brian Cornell said there was no realistic scenario for the money-losing Canadian arm to reach profitability until at least 2021.

It was granted protection from its creditors in Ontario Supreme Court Thursday.

“We had great expectations for Canada but our early missteps proved too difficult to overcome,” Cornell said. “Personally, this was a very difficult decision, but it was the right decision for our company.”

The Minneapolis-based retailer has B.C. locations in Campbell River, Courtenay, Nanaimo, Victoria, Saanich, Burnaby, Richmond, Coquitlam, Delta, Surrey, Langley, Maple Ridge, Abbotsford, Chilliwack, Kamloops, Kelowna, Vernon, Cranbrook and Prince George.

Target stores will remain open during a court-supervised liquidation.

Target is placing $70 million in an employee trust to ensure a minimum 16 weeks compensation, including wage and benefit coverage for workers not needed for the full wind-down period.

The decision came after an unsuccessful holiday season, Cornell said, despite best efforts by Target Canada to win over shoppers.

“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.”

The American retail giant launched its Canadian expansion in 2013, buying up former Zellers locations and arranging grocery stock through Sobey’s.

SFU business and marketing professor Lindsay Meredith said Target’s invasion of Canada was misguided from the start.

It launched with too many stores at once, he said, and it immediately turned off Canadians savvy to lower U.S. pricing when it instead charged prices in line with Canadian retailers.

“That was exactly what Canadians did not want to hear,” Meredith said.

When stores opened they were missing some of the U.S. brands in home decor and fashion shoppers wanted, he added.

Further blows that entrenched the retailer as a “screw-up” in Canadian minds included a massive data breach at the U.S. parent and recurring problems with empty store shelves.

“Empty shelves is a retailer’s kiss of death,” he said.

The latest challenge for Target has been the dive in the loonie to 84 cents U.S., which has left the company bridging a growing gap between what it pays for stock in the U.S. and what it sells it for in Canada.

But Meredith said he was surprised Target opted for a complete Canadian pull-out, coupled with creditor protection, rather than what he calls a “hedge hog defence” of retrenching to a small number of more profitable stores in key markets.

Big winners from Target’s demise will be established retail and grocery chains like Wal-Mart, Loblaws, Canadian Tire and even Sport Chek, Meredith predicted.

“All these guys will be happy – they just got rid of a major competitor that could have hurt them.”

He expects the stores will be sold piecemeal to multiple buyers “who will bite off a piece of the whale carcass” rather than to one replacement chain.

Other retailers have also struggled lately, including Sears, and fashion outlets including Mexx, Jacob and Smart Set also intend to close.

But Meredith said Target’s withdrawal will send a particularly strong warning to other U.S. retailers considering Canadian expansion, such as Nordstrom’s.

United Food and Commercial Workers local 1518 spokesman Jason Mann said Target’s failure to hire former Zellers workers meant it lacked staff experience to make the operation work.

Target Canada’s B.C. locations

 

Just Posted

Local volunteers get the scoop on bat poop

Bat droppings key to research in a number of areas

Colwood development draws ire of residents

Developer says he’s listened and addressed residents’ concerns

What is it like to be part of the Canadian Armed Forces?

Try military rations, combat gear and simulated shooting range on Saturday

B.C. needs Disability Act: Victoria council

Council motion asks province to make B.C. barrier free

100,000 bulbs shine bright for Lights of Hope

St. Paul’s Hospital in Vancouver launched its annual campaign to raise funds for equipment, research

‘I will now live in consistent fear’: Allan Schoenborn granted escorted leaves

The Merritt man was deemed not criminally responsible in the killing of his three children in 2008

Hammy the deer dodges conservation officers in Prince Rupert

The famous Prince Rupert hammock deer maintains his purple threads

‘No shirt, no service, no Canada’

Shirtless Tacoma man arrested after Canadian border officials say they found meth in rental vehicle

West Shore craft fair roundup

Holiday-themed events taking place on the West Shore

Weekend hit list: Things to do in Greater Victoria

FRIDAY Find Mr. Nutcracker and his cousin Tommy Tempo as they visit… Continue reading

Uptown’s Christmas Tree Light Up is Saturday night

Uptown assembling 54-foot-tall tree for fifth annual Light Up

Nasty note on B.C. windshield sparks online outrage

Vernon’s Bailey McDonald is using a painful experience to start conversation about invisible illness

Grade 12 student already has 1,500 towards carpentry apprenticeship

B.C. program launches trade careers from high school

Most Read