Minneapolis — Target Corporation plans to abandon its expansion into Canada less than 2 years after launch.
The company is shutting all of its 133 Canadian stores and expects to report about $5.4 billion in pre-tax losses for its fourth quarter, which finishes at the end of January.
“While this is a difficult decision, we believe it is the right one for Target,” says Brian Cornell, chairman and CEO of Target Corporation. “We had great expectations for Canada but our early missteps proved too difficult to overcome.”
Minneapolis-based Target faced supply chain problems that left stores understocked. This disappointed shoppers who had eagerly anticipated the retailer’s arrival in a market where the discount space had long been dominated by Wal-Mart Stores Inc.
Target does much of its own distribution in the United States, but hired Eleven Points Logistics, a subsidiary of Pittsburgh-based Genco, to run its Canadian warehouses.
Target will remain open during the liquidation process, and that with court approval it would pay all of its 17,600 Canadian employees a minimum of 16 weeks of compensation.
Minneapolis-based Target Corporation has 1,801 stores in the United States and at Target.com.
SOURCE: Reuters / Target Corporation