Targets stores all across Canada are set to close, including the store in Chatham.
Target Corporation announced today it plans to discontinue operating stores in Canada.
As a part of that process, this morning Target Canada filed an application for protection under the Companies’ Creditors Arrangement Act (the “CCAA”) with the Ontario Superior Court of Justice in Toronto.
“When I joined Target, I promised our team and shareholders that I would take a hard look at our business and operations in an effort to improve our performance and transform our company,” stated Brian Cornell, Target Corporation Chairman and CEO. “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.”
Cornell added: “Personally, this was a very difficult decision, but it was the right decision for our company. 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.”
Target Canada currently has 133 stores across the country and employs approximately 17,600 people.
Targets officials stated they are applying for a $70 million trust fund, which would ensure all employees would receive a minimum of 16 weeks of compensation, including wages and benefits coverage.
Target Canada stores will remain open during the liquidation process.
As part of its application, Target Canada is seeking the appointment of Alvarez & Marsal Canada as Monitor in the CCAA proceedings to oversee the liquidation and wind-down process for Target Canada and its subsidiaries. Subject to Court approval, Target Corporation has committed to provide a US$175 million debtor-in-possession credit facility to finance Target Canada’s operations during the CCAA proceedings. Target Canada is also seeking Court approval to engage Lazard to advise Target Canada in connection with the sale of its real estate assets.
“We hoped that these efforts in Canada would lead to a successful holiday season, but we did not see the required step-change in our holiday performance,” Cornell stated. “There is no doubt that the next several weeks will be difficult, but we will make every effort to handle our exit in an appropriate and orderly way.”
The move will lead to a $5.4 billion writedown.
Target has only been in Canada for two years.
I guess all the Starbucks within those Target stores will also be shut down.
The Starbucks in there treats it’s employees badly, I feel more comfortable knowing that Starbucks’ good reputation is preserved and not exploited by target any longer. .. at least in Canada. They don’t have Wi-Fi, they keep their employees’ hard earned tips, they give only a 10% discount which is way less than the discount at other Starbucks locations… they do have great employees there but target is a toxic atmosphere. You can tell they like to penny pinch. Good luck to all who are looking for jobs now.
Also they mainly higher part time so they dont have to pay benefits. .. so they will only be paying HR benefits for those 16 weeks.