U.S. retail giant Target says that after a disappointing holiday season, they have made the decision to cancel their Canadian operations and will close all their stores, including those in Calgary.
Target Corporation Chairman and CEO Brian Cornell made the announcement on Thursday morning.
"Personally, this was a very difficult decision, but it was the right decision for our company," he said in a statement.
Target has 133 stores in Canada and over 17,600 employees. The layoffs will include employees of Starbucks locations within Target stores as the staff are technically employed by the retail store, not the coffee chain. Starbucks plans to hire more than 8,000 Canadian employees in 2015 and will place an emphasis on interviewing displaced Target staff.
Target's announcement in 2011 that it had bought 220 Zellers locations from Hudson’s Bay Co., and was coming to Canada, was met with excitement by retail analysts. Canadian shoppers, too, looked forward to nabbing the great deals they had come to love at Target stores south of the border.
But the company's debut in Canada was marred by significant inventory problems that left many shelves bare, and shoppers frustrated. Canadians also expressed disappointment with the prices at Target Canada stores, which many insisted were markedly higher than in the U.S. outlets.
ATB economist Todd Hirsch says the company didn't live up to the fanfare that heralded its arrival into the country. "It seemed like when they came in, they had high expectation set by Canadians and they failed to deliver. I don't think they were ever able to get over that."
The company says in a release that it is seeking approval to build an employee trust fund of $70M ($59M US) to help nearly all of the laid-off workers with a minimum 16 weeks compensation along with benefits.
The timing of the closure surprised some of the shoppers at the Signal Hill Target location in southwest Calgary, but most agreed Target's foray into Canada had been less than successful.
“I think the prices are the biggest issue and I guess they had a lot of trouble in the beginning with getting stock in,” said Target shopper Cathy.
“It seemed like there were a lot of empty shelves a lot of times so that was kind of disappointing," said Amanda Hart, "but I’m sad to see it closed.”
Market Mall general manager Darren Milne say the shopping centre is in the process of finding a replacement tenant given Target's impending departure.
"We're disappointed to learn that Target will be leaving Market Mall," said Milne in an email statement to CTV. "They have been a valued partner. We're currently evaluating opportunities at this time and look forward to sharing plans for the space in due course."
The cost to close the Canadian operations will be in the range $500 to $600M.
(With files from CTVNews.ca)
