Target closing all Canadian stores
Retail giant Target is closing all 133 stores in Canada and is seeking creditor protection. More than 17,000 jobs will be lost.
It was an experiment that didn't work. With high hopes and high expectations, Target hoped to follow in the wake of Walmart, which has seen success north of the border.
But after two years of huge losses and no hope of a turnaround for at least another six years, the American retailer is cutting its losses and pulling out of Canada.
The announcement stunned consumers and the company's 17,600 employees.
Target officials say the company will leave Canada in a fair and orderly way by first seeking court approval to begin liquidating.
Target Corporation's CEO Brian Cornell says the decision was made by the board of directors in the best interest of shareholders and the company to leave Canada and concentrate on growing the business in the U.S.
Alex Arfiuzzaman, a retail consultant with InterStratics Consultants of Toronto, says Target's experience in Canada was never the same as it was in the U.S.
"Their fault was they thought of Canada as another state and an expansion into a new territory would have been the same as into another state, and that's not the case. You have metric laws, you have French labeling laws, you have tariffs which make it quite different than the United States. So they were never able to get the product into the stores at the same level as what you have in the United States, and the prices were always higher," said Arfiuzzaman.
Most analysts agree that Target hit Canada too big and too fast by opening more than 100 stores almost at the same time two years ago. Some say that was too ambitious and there should have been only a few stores opening in near border locations so that Target could better test and understand the Canadian market.
Even CEO Brian Cornell acknowledged some big mistakes including taking on too much, too fast.
Other analysts say Target also failed to take into account that the retail sector in Canada is much more competitive than the company believed.
During its 22 months in Canada Target lost $2.1 billion, more than $3 million a day.