TORONTO, Ontario -- Almost two years to the day after announcing its intention to enter Canada, Target said it will close all its stores in the country after suffering over $2-billion in losses, the company has 133 Canadian locations and 17,600 employees in Canada.
U.S. discounter Target Corporation is closing its money-losing stores in Canada after almost two troubled years here.
The Minneapolis-based retailer said on Thursday it filed an application for protection under the Companies’ Creditors Arrangement Act with the Ontario Superior Court of Justice in Toronto.
“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,” said Brian Cornell, who became the new chief executive officer last summer.
“With the full support of Target Corporation’s board of directors, we have determined that it is in the best interest of our business and our shareholders to exit the Canadian market and focus on driving growth and building further momentum in our U.S. business,” he said in a statement.
With 133 stores in Canada and about 17,600 employees, Target expects to report about $5.4-billion (U.S) of pretax losses on discontinued operations in the fourth quarter of 2014, mainly as a result of the writedown of the company’s investment in Target Canada along with costs tied to leaving this country and operating losses in the quarter before Thursday’s court filing.
Target expects to report about $275-million of pretax losses on discontinued operations in fiscal 2015.
Target anticipates its cash costs to discontinue its Canadian operations to be $500-million to $600-million, most of which will occur in the retailer’s 2015 fiscal year or later. It said it has enough resources to fund these expected costs, including cash on hand and ongoing cash generation from its U.S. business...
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