Target is shutting down its Canadian operation.

[BubberMiley]

I think that reasoning that people expected U.S. stock and prices is overblown; I think they just expected to buy things they were looking for at a reasonable price. Wal-Mart was able to enter the Canadian market on a similarly large scale in tough economic times and remained profitable while doing it. But their shelves were full with things people want. That made all the difference.

Even though they goofed in making their first impression, I was hopeful they would get their act together and be more committed to their massive investment in the Canadian market. All they had to do was improve their distribution, price their products competitively, and get some competent buyers to fill their shelves. There is still a large portion of the population who are committed to not shopping at Walmart as much as possible. Sadly, they are left with fewer options and a whole lot of retail scorched earth that will take a long time to fill.

[Argus]

I'm pretty sure this will become a case study in management arrogance and incompetence in business and marketing schools around the world. Seven billion dollars wasted on a year and a half failed foray into Canada with absolutely nothing to show for it but bad publicity and a dented brand.

This from a previous Canadian Target exec does a lot to explain the failures of this company in Canada.

http://gawker.com/why-was-target-canada-such-a-disaster-1579554288

Oh well, looking forward to the Nordstrom opening in Ottawa in about six weeks!

Edited January 16, 2015 by Argus

[Mighty AC]

This from a previous Canadian Target exec does a lot to explain the failures of this company in Canada.

http://gawker.com/why-was-target-canada-such-a-disaster-1579554288

My friend, also a Target Exec, gave the exact same account. Why bother recruiting talented retail execs away from other companies when they had absolutely no intention of allowing them to deviate from the script and use their experience to solve problems? You're right, this will certainly be one of the management disasters studied by future students.

[GostHacked]

I've always thought this of Target. They needed to build their own, bigger stores in order to fit all the goods that can compete with Walmart and be more similar to the US Targets. They tried to save time and money by taking over Zellers, and it backfired.

Canadians were also used to shopping at Target in the US, which had very different merch (for the US market) that you couldn't find in Canada and they didn't sell at Canadian Target stores. You walk in to a Target in the US and it's like "wow, all this stuff I've never seen before or can't get in Canada, and for cheap prices too!". That experience wasn't replicated.

Along with oft-mentioned things like price issues and empty shelves, Target really blew it.

Even if they did decide to build new stores (which does not need to happen) they would have spent 3 times the money and still they would have had to leave the Canadian market. They simply did not know what they were doing in Canada.

[bush_cheney2004]

This from a previous Canadian Target exec does a lot to explain the failures of this company in Canada.

Good stuff...I love this comment:

For those not in Canada, Zellers is essentially Walmart only more crappy. Walmart might be for poor people, but they are generally clean and well stocked. Zellers stores often weren't.

So Target bought the already crappier-than-Walmart (hard to do) Zellers locations, then proceeded to make them even crappier. Thank God they got the hell out and limited the blood loss.

I am going to a nice, shiny, fully stocked Super Target this afternoon and will wish them well.

[BubberMiley]

I am going to a nice, shiny, fully stocked Super Target this afternoon and will wish them well.

Don't vandalize the place because you're bitter for being a shareholder.

[Boges]

If a Target in its home state wasn't fully stocked then THAT would be a serious reason for concern.

Once thing that struck me in that Gawker story was the policy of not filling shelves with Stuff you Do Have and just waiting until the Stuff you Don't Have arrives.

Empty shelves gives off a stink of suck, and customers don't like it.

They should have opened stores in populated areas to get a foothold and then spread out. Starting with 100 plus stores off the bat was destined to fail. Lowes only had one store in Brampton for years and now it's opening more locations.

I'd argue Lowes is the best Home Improvement Store I've ever been in, they've done it right.

Edited January 16, 2015 by Boges

[bush_cheney2004]

Don't vandalize the place because you're bitter for being a shareholder.

Quite to the contrary, I enjoyed my shopping experience to the max. I have been going to Target for over 35 years, and never bitched about better prices and variety at Zellers ! Love that 5% off Target Red Card.

[BubberMiley]

Love that 5% off Target Red Card.

I'm so envious. I guess you haven't seen the quarterly statement yet.

[bush_cheney2004]

I'm so envious. I guess you haven't seen the quarterly statement yet.

Who knows....maybe we will get a Zeller's, Canadian Tire, and Loblaws too. I want that authentic Canadian shopping experience !

[Boges]

Who knows....maybe we will get a Zeller's, Canadian Tire, and Loblaws too. I want that authentic Canadian shopping experience !

No Canadian company would have the hubris to think they could open a hundred stores nationally that all sell the same thing in the same way and be a resounding success.

I was in Florida recently, and was looking in Walmarts and Targets for some summer clothes, I'm in Florida after all. I mostly saw hoodies and sweaters. I'M IN FLORIDA!!!

I was told these national brands sell the same stuff everywhere. It's as if they think a cookie cutter way of doing retail is the best. I suppose it's the most brainless but it doesn't appeal to individual tastes.

I think Walmart understands the market they're going into the best, They actually do research and that's why they're almost always a gigantic success wherever they go across the world.

Edited January 16, 2015 by Boges

[bush_cheney2004]

No Canadian company would have the hubris to think they could open a hundred stores nationally that all sell the same thing in the same way and be a resounding success.

Apparently it was even difficult in Canada (i.e. Zellers).

I was in Florida recently, and was looking in Walmarts and Targets for some summer clothes, I'm in Florida after all. I mostly saw hoodies and sweaters. I'M IN FLORIDA!!!

I was in California recently....same thing. Hoodies are actually quite popular for other social reasons.

I think Walmart understands the market they're going into the best, They actually do research and that's why they're almost always a gigantic success wherever they go across the world.

Agreed....but I do not want Target to become Walmart. Yuck ! I can choose either or neither.

[Boges]

Apparently it was even difficult in Canada (i.e. Zellers).

Zellers was shitty but it had it's role. It was a discount version of the Bay.

I don't know if large American chains have tiers of stores owned by the same parent company.

Major grocery stores in Canada do it all the time. Loblaws has No Frills, Metro has Food Basics and I believe Sobey's has Freshco. (formerly Price Chopper) I saw Zellers as a department version of this dynamic.

If Target Shareholders are fine with a company that can't hack it outside its own borders then c'est la vie. But many other chains (not just Walmart) do it exceedingly well.

[BubberMiley]

Zellers was profitable right to the end and a very successful company. They got out just in time though and fleeced the Target shareholders for a cool $2 billion!

Retail is different now and Target has no strategy for dealing with it. Online shopping is taking a bigger and bigger share of the pie every year. Even Walmart has embraced ecommerce. Target already blew that by giving up all their customers' credit card information. Within a short time, I expect they'll be closing the rest of their stores as quickly as they are closing the ones in Canada.

[bush_cheney2004]

Zellers was shitty but it had it's role. It was a discount version of the Bay.

Target couldn't make any money that way....bring back Zellers for that "shitty" experience.

I don't know if large American chains have tiers of stores owned by the same parent company.

They used too...Target and Dayton Hudson Corp. used to be the same, and were actively involved in the big box consolidations seen in the USA over the past 20 years (Sears, JC Penney, K Mart, Macey's, Kohl's, Montgomery Ward, etc.).....all concurrent with the rise of Walmart.

Major grocery stores in Canada do it all the time. Loblaws has No Frills, Metro has Food Basics and I believe Sobey's has Freshco. (formerly Price Chopper) I saw Zellers as a department version of this dynamic.

The U.S. has several tiers of retail grocery...regional and national. There has been some consolidation here as well. A Super Target combines grocery with department store. I don't know if Canada even got these.

If Target Shareholders are fine with a company that can't hack it outside its own borders then c'est la vie. But many other chains (not just Walmart) do it exceedingly well.

Target shareholders were happy with continued growth and success in the U.S. first. It is not like Walmart, which has also had lesser problems in Canada and other nations, mostly labour related.

[bush_cheney2004]

...Within a short time, I expect they'll be closing the rest of their stores as quickly as they are closing the ones in Canada.

Sure....should happen any day now.

I am glad that Target learned sooner rather than later that it can't make any money in Canada by duplicating a "shitty" Zellers.

[BubberMiley]

I am glad that Target learned sooner rather than later that it can't make any money in Canada by duplicating a "shitty" Zellers.

Nearly $8 billion and counting of not soon enough.

[bush_cheney2004]

Nearly $8 billion and counting of not soon enough.

Easily written off....I know that sounds like a lot more money...in Canada !

[guyser]

I don't know if large American chains have tiers of stores owned by the same parent company.

Perhaps you have heard of Old Navy or Banana Republic ? In between those two levels of stores is one called GAP. GAP owns both of them.

If Target Shareholders are fine with a company that can't hack it outside its own borders then c'est la vie. But many other chains (not just Walmart) do it exceedingly well.

The shareholders should be pissed that $5B is down the drain for what seemed to result from extreme stupidity, American exceptionalism (<---- Read Arrogance) and not having a single plan on how to open in another company.

The writing was on the wall for any shareholders out there. The provisions in the leases meant Target had to move way faster than they should or incur penalties for having a mall store closed too long.

After that the empty shelves , which lets face it those who shopped there complained about from day 1, the Q's should have been asked. But they didnt.

But hey, Target is not alone. Best Buy sucked here as well. Wal Mart bailed on Germany, Tesco bailed on the USA....all incuring heavy losses....all blamed on arrogance too!

But the funny one to read is Starbucks in Australia. Not a business grad comes out of an Aussie Uni without knowing exactly why that failed.

[Argus]

Target shareholders were happy with continued growth and success in the U.S. first. It is not like Walmart, which has also had lesser problems in Canada and other nations, mostly labour related.

The problem for Target is that Wal-Mart, while it has had issues, has managed to expand around the globe, which helps drive stock up. As one report stated, if Target can't expand into Canada, where retail margins are generally higher, where it had brand name recognition and a lot of fans, where on Earth CAN it expand to?

[BubberMiley]

It seems to me that leaving now is the worst possible scenario and is likely to cut their throat as a viable company even in the U.S. They've already built the infrastructure, hired the employees, and set up shop. They may be losing barrels of cash every day, but all they needed to do was dump the underperforming stores, improve their distribution system (including web sale distribution), get some sellable merchandise, and advertise the hell out of how they have improved their shopping experience. There is a massive retail hole that still exists, and there is a lot of money to be made.

Now they're stuck paying more than a half a billion just to get out. That's not to mention the pennies on the dollar they will have a hard time getting for the massive stores they've built. In Winnipeg, they own (not lease) a huge, very expensive store on prime commercial real estate that will be very, very hard to fill because every other potential big retailer already has a store within two blocks of it. It opened less than three months ago, which indicates it never even got a chance to prove its profitability. Maybe they'll luck out and Kohls will come swooping in like vultures.

[guyser]

. There is a massive retail hole that still exists, and there is a lot of money to be made.

There is?

If no one was shopping at Target , and it appears they weren't, then they werwe getting the goods elsewhere. So where is the hole?

Id never gone into a target here in Canada. Been to one in NY but once only.

Never set foot in Wal Mart in my life . Dont ever plan to .

So I can get what I need elsewhere obviously so where is this hole ?

[bush_cheney2004]

It seems to me that leaving now is the worst possible scenario and is likely to cut their throat as a viable company even in the U.S. They've already built the infrastructure, hired the employees, and set up shop. They may be losing barrels of cash every day, but all they needed to do was dump the underperforming stores, improve their distribution system (including web sale distribution), get some sellable merchandise, and advertise the hell out of how they have improved their shopping experience. There is a massive retail hole that still exists, and there is a lot of money to be made.

No, Target projected profitability in Canada by 2021, but the the new CEO (and board I presume) decided not to throw more good money after bad money. He is getting praise for admitting the obvious and cutting off the bottom line cancer ASAP. If Canada is such a great retail opportunity, then another concern can fill the void. Bring back Zellers !

[bush_cheney2004]

.....if Target can't expand into Canada, where retail margins are generally higher, where it had brand name recognition and a lot of fans, where on Earth CAN it expand to?

Target is expanding with its larger Super Target box stores (200,000 square feet) that include grocery, cafe, optical, portrait studio, deli, bakery, etc. It also has a newer City Target small box concept for urban areas and smaller cities.

http://www.huffingtonpost.com/2012/07/18/target-citytarget-stores_n_1684484.html

[Bryan]

I am glad that Target learned sooner rather than later that it can't make any money in Canada by duplicating a "shitty" Zellers.

The problem was they weren't duplicating anything. Not the Zellers experience, not the Target experience. The stores were their own brand of shitty. The problem was not that Canadians didn't embrace Target, it's that we are still waiting to see an actual Target in Canada.