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

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Environment Canada has issued a wind warning for Greater Victoria, with winds expected to get up to 70 km/h Friday morning. (Don Denton/Black Press Media)
Wind warning promises blustery Friday for Greater Victoria

Winds up to 70 km/h expected Friday morning

Passengers in rows 13 to 19 on Air Canada Jazz flight 8069 from Vancouver to Victoria Feb. 28 were exposed to a case of COVID-19. (THE CANADIAN PRESS/Nathan Denette)
COVID-19 exposure found on flight from Vancouver to Victoria

Passengers in rows 13 to 19 on Air Canada Jazz flight 8069 Feb. 28 affected

Crews deal with a rock slide on the Malahat section of Highway 1 in 2017. (Black Press Media file photo)
Rock work closes Highway 1 in Langford for spurts

Friday closures could delay drivers up to 20 minutes

Low interest rates have acted as a catalyst for the pandemic real estate market. (THE CANADIAN PRESS/Graeme Roy)
Real estate sales surging across Greater Victoria but risks lie ahead

Single family home prices jump nine per cent over past year while condo values remain stable

Protestors against old growth logging gather in front of the courthouse in Victoria on Thursday morning. (Don Denton/Black Press Media)
Fairy Creek protesters gather at Victoria courthouse

Logging company seeks injunction to remove blockades near its Port Renfrew operation

B.C. Health Minister Adrian Dix and provincial health officer Dr. Bonnie Henry head for the B.C. legislature press theatre to give a daily update on the COVID-19 pandemic, April 6, 2020. (B.C. government)
B.C. nears 300,000 COVID-19 vaccinations, essential workers next

564 new cases, four deaths, no new outbreaks Thursday

(Black Press Media file photo)
POLL: How’s your butter?

Recent reports have some Canadians giving a second look to one of… Continue reading

Anyone with information on any of these individuals is asked to call 1-800-222-TIPS (8477) or visit the website victoriacrimestoppers.ca for more information.
Greater Victoria Crime Stoppers wanted list for the week of March 2

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

Walter Gretzky father of hockey hall-of-famer Wayne Gretzky waves to fans as the Buffalo Sabres play against the Toronto Maple Leafs during third period NHL hockey action in Toronto on Tuesday, Jan. 17, 2017. THE CANADIAN PRESS/Nathan Denette
Walter Gretzky, father of the Great One, dies at 82

Canada’s hockey dad had battled Parkinson’s disease and other health issues

The intersection of Melrose Street and Third Avenue. (ELENA RARDON / ALBERNI VALLEY NEWS)
Suspect in custody after two pedestrians struck in Port Alberni hit and run

RCMP asking for video footage, credit witnesses for quick arrest

(National Emergency Management Agency)
No tsunami risk to B.C. from powerful New Zealand earthquake: officials

An 8.1 magnitude earthquake shook the north of New Zealand Thursday morning

Comox Valley RCMP had access to 20 Street blocked off between Cousins and Choquette avenues as they conducted a raid of a house on the block. Photo by Terry Farrell
Comox Valley RCMP raid Courtenay problem house, several arrests made

Comox Valley RCMP conducted a raid of a problem house on 20th… Continue reading

(AP Photo/Richard Vogel, File)
Pandemic stress, isolation key factors as to why Canadians turned to cannabis, alcohol

Study found that isolation played key role in Canadians’ substance use

Grand Forks’ Gary Smith stands in front of his Church of the Flying Spaghetti Monster float. Photo: Submitted
Grand Forks’ Flying Spaghetti Monster leader still boiling over driver’s licence photo

Gary Smith, head of the Church of the Flying Spaghetti Monster of B.C., said he has since spoken to lawyers

Most Read