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

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

Black Press file photo
RCMP seek suspect in Vancouver Island-wide crime spree

Crimes stretched from Deep Bay to Qualicum, Ladysmith, Chemainus and Youbou

Things are looking up for Vancouver Island as zero COVID-19 cases have been reported for the first time since October. THE CANADIAN PRESS/Darryl Dyck
Island records zero new COVID-19 cases for the first time since October

For the first time since October, the province is reporting zero new… Continue reading

Black Press Media file
Port Hardy RCMP on the hunt for porta-pottie arsonist

The porta-potties were lit on fire early in the morning on June 13

Eke Me-Xi students enjoy a field trip to Malcolm Island. (Submitted photos)
Eke Me-Xi Learning Centre takes field trip to Malcolm Island

Once at Bere Point, students made themselves at home in the day-use area

Mount Waddington Regional Fall Fair logo
Mount Waddington Regional Fall Fair cancelled again due to COVID-19 restrictions

The 2022 fall fair is still scheduled to take place in Port Hardy

Marco Mendicino, Minister of Immigration, Refugees and Citizenship during a press conference in Ottawa on Thursday, May 13, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Canada to welcome 45,000 refugees this year, says immigration minister

Canada plans to increase persons admitted from 23,500 to 45,000 and expedite permanent residency applications

RCMP crest. (Black Press Media files)
Fort St. John man arrested after allegedly inviting sexual touching from children

Two children reported the incident to a trusted adult right away

A Lotto 6/49 ticket purchased in Parksville for the June 19, 2021 draw is a $3M winner. (Submitted photo)
Winning Lotto 6/49 ticket worth $3M purchased on Vancouver Island

Lottery prize winners have 52 weeks to claim jackpot

Barbara Violo, pharmacist and owner of The Junction Chemist Pharmacy, draws up a dose behind vials of both Pfizer-BioNTech and Oxford-AstraZeneca COVID-19 vaccines on the counter, in Toronto, Friday, June 18, 2021. An independent vaccine tracker website founded by a University of Saskatchewan student says just over 20 per cent of eligible Canadians — those 12 years old and above — are now fully vaccinated. THE CANADIAN PRESS/Nathan Denette
At least 20% of eligible Canadians fully vaccinated, 75% with one dose: data

Earlier projections for reopening at this milestone didn’t include Delta variant

This undated file photo provided by Ernie Carswell & Partners shows the home featured in the opening and closing scenes of The Brady Bunch in Los Angeles. Do you know the occupation of Mike Brady, the father in this show about a blended family? (Anthony Barcelo/Ernie Carswell & Partners via AP, File)
QUIZ: A celebration of dad on Father’s Day

How much do you know about famous fathers?

Emily Steele holds up a collage of her son, 16-year-old Elijah-Iain Beauregard who was stabbed and killed in June 2019, outside of Kelowna Law Courts on June 18. (Aaron Hemens/Capital News)
Kelowna woman who fatally stabbed teen facing up to 1.5 years of jail time

Her jail sentence would be followed by an additional one to 1.5 years of supervision

Cpl. Scott MacLeod and Police Service Dog Jago. Jago was killed in the line of duty on Thursday, June 17. (RCMP)
Abbotsford police, RCMP grieve 4-year-old service dog killed in line of duty

Jago killed by armed suspect during ‘high-risk’ incident in Alberta

The George Road wildfire near Lytton, B.C., has grown to 250 hectares. (BC Wildfire Service)
B.C. drone sighting halts helicopters fighting 250 hectares of wildfire

‘If a drone collides with firefighting aircraft the consequences could be deadly,’ says BC Wildfire Service

A dose of the Pfizer-BioNTech COVID-19 vaccine is pictured at a vaccination site in Vancouver Thursday, March 11, 2021. THE CANADIAN PRESS/Jonathan Hayward
NACI advice to mix vaccines gets varied reaction from AstraZeneca double-dosers

NACI recommends an mRNA vaccine for all Canadians receiving a second dose of a COVID-19 vaccine

Most Read