This morning, January 15, 2015 Target Corporation announced its plans to discontinue operating stores in Canada. They already have filed for bankruptcy protection. This will be a major hit for the Oakville South/Hopedale Mall that now will have only Metro, Tim Hortons, and Shoppers Drug Mart as anchor tenants. Recently the Mall saw the additional loss of long time tenant, El Spero - which after being asked to leave by the landlord has found a new home in Bronte Village.
“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,” said Brian Cornell, Target Corporation Chairman and CEO.
Target employs about 110 people out of the Oakville location and has a total of 133 stores with 17,600 employees across Canada. The court has been asked to consider an application by Target to set aside $70 million in an Employee Trust. Should the Trust be approved it would provide most employees with a minimum of 16 weeks compensation, including wages and benefits for employees who will not be required during the winding down of the Canadian operations. Stores will remain open during the liquidation process, but likely will be amalgamated as stock dwindles.
Pharmacy Clients
People who regularly have their prescriptions filled by the Target Pharmacy Department, can rest assured that clients will be notified by phone with as much notice as possible so that they can make alternate arrangements. Pharmacies in Target are separately owned, and will not fall under the same program as outlined by Target for store employees.
At this time the Oakville staff have not been given a closing date, and further information will be provided by senior staff at a future date.
“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.”
Target Corporation’s cash costs to discontinue Canadian operations are expected to be $500 million to $600 million, most of which will occur in the Company’s 2015 fiscal year or later. The Company has sufficient resources to fund these expected costs, including cash on hand and ongoing cash generation by its U.S. business.