Target Canada unable to find takers for 55 store leases
Target Canada is returning 55 store leases back to their landlords after no bidders expressed serious interest in taking them off the exiting retailer’s hands.
The bulk of Target Canada’s 133 locations are being prepared for auction next week as its court-supervised wind up continues.
“We’re looking forward to next week’s auction,” said Tracy Sandler, partner at Osler Hoskin & Harcourt LLP, which represents Target.
“We think it’s going to be robust and we’re looking forward to finalizing and entering into transactions that will let us maximize the value of our portfolio.”
Sandler says it’s possible that a number of other landlords will decide to buy back their properties during the upcoming auction. In March, Target struck a deal to sell 11 properties to Oxford Properties Corp. and Ivanhoe Cambridge for $138 million before taxes.
But no bidders came forward for 55 other properties by the deadline for next week’s auction and they have been returned to their landlords.
The lack of interest in the leases underscores the tough environment retailers are facing as consumers split more of their shopping dollars between bricks-and-mortar stores and online outlets. The large-format locations Target operates also limit the number of potential buyers.
Big national merchants, like Walmart, Loblaw and Canadian Tire are all said to be interested. But all potential bidders for former Target locations will be very selective, experts say.
Others, such as foriegn retailers eyeing a potential expansion into Canada, may also be gun-shy given Target’s shockingly difficult foray across the border.
The U.S. retailer announced in January it would shut all 133 of its Canadian stores, only two years after its highly anticipated launch north of the border.
The discount retailer said disappointing sales figures indicated its Canadian locations would not be profitable for several years.
The auction will be held next week at the Osler’s Toronto offices, according to a filing with the Ontario Superior Court.
— with files from Canadian Press