We recently found out that Target Corp. has made the decision to halt its Canadian operations, which include precisely 133 stores and 17,600 employees. The discount retailer has been criticized for high prices ever since opening its doors in Canada in March 2013.
“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. Personally, this was a very difficult decision, but it was the right decision for our company,” Target chairman and CEO Brian Cornell said in a statement.
This will mean several things for the industry – one of them being that thousands of people are going to be out of work within the next 16 to 20 weeks.
In addition to this, there will be a lot real estate on the market but having buyers come forward is a totally different picture. Target Canada filed for protection under the Companies’ Creditors Arrangement Act in Toronto on Thursday. This means that the Ontario court will oversee the closure of the Canadian stores as Target liquidates its inventory and sells off store leases.
In a report by The Star, Don Gregor, Aurora Realty Consultants’ chief operating officer, told the paper that Target is hoping to sell all of its leases but Gregor can’t image who would possibly buy such a vast amount of real estate, estimated at about 20 million sq. ft., all at once. Ultimately, the return of all of this retail space will hurt smaller malls, pensions, and real estate investment trusts that invest in malls.
Target has predicted that the loss on discontinued operations will be approximately US$5.4 billion on the Canadian stores. CJ
