Target’s exit from Canada will be ‘rapid’
Shoppers will begin to see deep discounts on apparel, household essentials and home décor items among thousands of other products at Target Canada in about a couple of weeks’ time, a spokesperson confirmed Tuesday.
“We do expect that to begin in about 2-3 weeks,” spokesperson Eric Hausman said in an email message. Liquidation sales will be followed on fast by store closures, experts suggest.
Analysts at Desjardins Securities said Tuesday all 133 Target locations across Canada will likely be closed by the early spring, or just two years after the U.S. retailer launched in Canada.
“It appears likely in our view that all stores will be closed before the end of April,” analysts at the financial services firm said. “Target’s exit from Canada appears likely to be orderly and rapid.”
As part of Target Canada’s bankruptcy filing last week, the Canadian chain said it will pay employees for up to 16 weeks of work, or to May 7, as it winds down operations.
What you see, what you get
What’s in stores now is largely what shoppers will see deals on, with no new merchandise coming in from suppliers. Additional merchandise located at three distribution centres will find its way into stores in the coming weeks as well.
As part of its application to an Ontario bankruptcy court, Target has immediately cancelled all purchase orders from Canadian and U.S. vendors that haven’t been shipped, and on orders with overseas vendors if the title of goods hasn’t yet passed.
Target’s expected to begin looking at selling its Canadian leases and real estate soon, as well. Last week, company management said on a conference call they will begin discussions with possible suitors in two or three weeks’ time.
Target holds leases to 137 store locations in all, as well as the real estate on three corporately owned stores. Experts suggest the leases will draw interest from multiple parties, but Walmart, Canadian Tire and Loblaw will show the strongest interest. But just how strong is uncertain.
Growth estimates for the economy in general and retail spending in particular are being shaved almost weekly as collapsing oil prices ripple throughout the country, denting consumer confidence in the process.
Rival retailers may not be eager to snap up Target’s underperforming locations.
“It is not clear to us that demand for 100,000 square-foot boxes is particularly large, or growing, especially in light of Target’s recent operating experience in Canada,” Desjardins analyst Keith Howlett said.
WATCH: Experts suggest it won’t take long for other retailers to snap up prime target locations. Doug Vaessen reports.
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