Target to shut 133 Canada stores to stem massive losses
Target is closing up shop in Canada.
More than 17,600 employees will eventually lose their jobs when the United States discount retailer closes its 133 Canadian stores after only about two years, to end financial losses that went as high as a billion dollars a year.
Target Corp Chairman and CEO Brian Cornell said yesterday that the company didn't see a realistic way for the chain to become profitable before at least 2021. Cornell said on Target's corporate blog that its Canadian arm was losing money every day.
The closing is Cornell's first major move since becoming CEO in August. Target will concentrate instead on improving its US business.
Cornell said Target Canada did not see the improvements it was looking for over the holiday period.
Holiday improvement insufficient
Target entered Canada in 2013. While operations there improved before the holiday season because of changes in pricing and product assortment, Target still wasn't satisfied with its performance.
Target faced problems from the get-go when it entered Canada. There were costly regulations, a slow economy and increasing competition. Cornell said on the blog that when Target Canada first opened, the company knew that many Canadian consumers already shopped its US stores and liked the brand.
"But, we missed the mark from the beginning by taking on too much too fast," he said.
Cornell said Canadian stores struggled with inventory and pricing problems and "delivered an experience that didn't meet our guests' expectations, or our own."