Target stores, like the one in Langley, will close, unable to make money since opening in Canada about two years ago.
It seems the firm wouldnâ€™t make money for some time to come so it will focus on its 1,934 stores in the United States.
The Langley store opened May 7, 2013. Willowbrook Shopping Centre is owned by Bentall Kennedy which is not making any statements about the loss of the anchor tenant.
â€œAfter 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. Personally, this was a very difficult decision, but it was the right decision for our company. With the full support of Target Corporationâ€™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,â€ said Brian Cornell, Target Corp. chairman and CEO.
Target Canada filed an application for protection under the Companiesâ€™ Creditors Arrangement Act (CCAA) with the Ontario Superior Court of Justice in Toronto.
The court filings include $5.4 billion pre-tax losses and the company expects to close in fiscal year 2015.
The Minneapolis-based retailer is setting up a $70 million fund to provide severance. The 133 Canadian stores have 17,600 employees. There are 19 stores in B.C.
Upon approval by the court, the proposed trust would provide that nearly all Target Canada-based employees receive a minimum of 16 weeks of compensation, including wages and benefits coverage for employees who are not required for the full wind-down period. Target Canada stores will remain open during the liquidation process.
â€œThe Target Canada team has worked tirelessly to improve the fundamentals, fix operations and build a deeper relationship with our guests. 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,â€ said Cornell. â€œThere 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.â€
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.
Target has said it will continue to honour gift cards during CCAA. If people wait too long, they may end up on a long list of creditors which tend not to receive the full value of whatâ€™s owed. There are $7 million worth of Target Canada gift cards in peopleâ€™s wallets.
Consumer Protection BC is responsible for enforcing B.C.â€™s gift card law and this law mainly speaks to expiration dates and allowable fees. B.C.â€™s gift card law is silent on the matter of business closures or bankruptcies, according to Tatiana Chabeaux-Smith, the marketing spokesperson for Consumer Protection BC.
Subject to court approval, Target Corporation has committed to provide a US$175 million debtor-in-possession credit facility to finance Target operations during the CCAA proceedings.
Target can trace its heritage back to 1902 with the creation of Dayton Stores. Target is the discount branch started in the 1960s.
Other retailers with Langley area operations are also struggling.
Sony Corp. will close all 14 of its Sony Stores across Canada as the company continues to struggle to reshape its business.
It closed its store on the Langley Bypass a couple of years ago but there are still three in the Lower Mainland.
â€œOver the next six to eight weeks we are closing our Sony Stores in Canada and will redirect all of this business through our national network of Sony retailers, our online storeâ€¦ as well as through our Sony-trained Telesales team,â€ read the statement.
The companyâ€™s news came on the same day that Target announced it would be shuttering all of its retail stores in Canada.
The closure comes as Sony is struggling to reshape its business amidst years of losses. For the current fiscal year which ends in March, the company is estimating a $1.9 billion (U.S.) loss.
Within the last year the company sold its Vaio personal computing business and spun out its TV manufacturing operations.
It is now reported to be considering exiting the TV business entirely. The company is also considering options for its lacklustre cellular phone division.
MEXX Canada will close all of its 95 stores, including one on the Langley Bypass, by the end of February after restructuring failed. The Dutch-based retailer with 315 stores worldwide announced bankruptcy in December 2014.
Reitmans announced in November 2014 that it would close 107 of its Smart Set stores, converting some to its other brands (Reitmans, Penningtons, Addition Elle, RW&Co. and Thyme Maternity).
Jacob, a womenâ€™s clothing retailer, went bankrupt and closed its 92 stores in 2014.
– With files from the Ottawa Citizen and Postmedia.
For more from the Ottawa Citizen, click HERE.