Target is shutting down its Canadian operation.

[bush_cheney2004]

Sorry, but Target failed itself (including Canadian consultation and employees) long before failing to realize an actual Target in Canada. They started with crappy Zellers retail spaces and inventory. Just like other famous retreats (Sam's Club, Big Lots), Target got the hell out of Dodge...errr...Canada.

[Boges]

Zellers was better than Target actually. Sure it was neater but Zellers actually sold large appliances and mattresses.

Sure the clothing and the housewares were pretty good at Target but the rest was rather redundant when you considered the competition.

Edited January 17, 2015 by Boges

[bush_cheney2004]

Zellers was better than Target actually. Sure it was neater but Zellers actually sold large appliances and mattresses.

OK...after doing some homework, it looks like Zellers started like the "five and dime" stores I remember as a child, including a partnership with W.T. Grant in the USA. My family often shopped at the local Grant's store back in the 1960's. Zellers started as a retailer "for thrifty Canadians" according to the wiki article.

So this was a mis-mash from the 'git go...as Target stores do not operate in that retail space.

Edited January 17, 2015 by bush_cheney2004

[Bryan]

You're mistaken on several levels.

First, Zellers had not been a "five and dime" for a very long time. They were a full service department store. Remember, Target started out as a discount/clearance store too. Things change.

Second, Target didn't take on ANYTHING from Zellers. All stock and fixtures were liquidated before they came in, and all of the stores were completely gutted and fully remodelled from wall to wall, floor to ceiling. There was no connection to Zellers at all. Their shittiness was entirely their own creation.

[bush_cheney2004]

...First, Zellers had not been a "five and dime" for a very long time. They were a full service department store. Remember, Target started out as a discount/clearance store too. Things change.

No...some things do not change. Target bought the Zellers locations and obviously was saddled with leftover "crappy" inventory, and failed to get warehousing and distribution up to snuff. Target buyers in the North America and Asia are still getting the right stuff to U.S. shelves, but it didn't happen in Canada for whatever reason.

The constant references to Zellers are inevitable if only because of the physical retail boxes, but the retail model of maxed out clutter ( a la Walmart) is not the Target shopping experience. Sometimes less is more.

[Boges]

No...some things do not change. Target bought the Zellers locations and obviously was saddled with leftover "crappy" inventory, and failed to get warehousing and distribution up to snuff. Target buyers in the North America and Asia are still getting the right stuff to U.S. shelves, but it didn't happen in Canada for whatever reason.

The constant references to Zellers are inevitable if only because of the physical retail boxes, but the retail model of maxed out clutter ( a la Walmart) is not the Target shopping experience. Sometimes less is more.

You think Target would sell old Zellers merchandise? That's a joke right.

Everything was new. Stop blaming Zellers for Target's failure.

If anything these locations weren't large enough. No room for full service groceries.

[bush_cheney2004]

You think Target would sell old Zellers merchandise? That's a joke right.

Everything was new. Stop blaming Zellers for Target's failure.

I am not blaming Zellers....it was a Target FAIL. And it was a plan that was shot down many times before. Glad the nightmare is over.

My Target stock is up 25% year over year even with a big Canadian headache.

[August1991]

Target shuts down because it runs out of money.

Ontario Hydro continues because it has access to other people's money.

Link

[PrimeNumber]

The target that was set to open where I am currently working was a Zellers, the Zellars sold off every single piece of it's merchandise for incredibly low prices (I got a matching sofa and loveseat set for $50) before the target was set to even put their new sign up. Unfortunately the sign was all that was seen of Target around here..

[Bryan]

No...some things do not change. Target bought the Zellers locations and obviously was saddled with leftover "crappy" inventory,

No. No inventory. None. All of it was liquidated before Target took over the leases.

You're right about the biggest mistake though -- the supply chain was already there and they foolishly chose to cast it aside and try to build their own from the ground up without doing any due diligence on the market they were entering. Other foreign companies have not had the issues Target did. The Ikea in Winnipeg is exactly the same as the one in Bloomington. The Marshalls in Winnipeg are exactly the same as the ones in North Dakota and Minnesota. Cabela's in Winnipeg are exactly the same as the ones in North Dakota and Minnesota. They carry THE SAME products that people expect to see in those stores. In most cases, even the prices are really close (close enough at least that going down to the US for those particular stores was no longer worth it).

What Target should have done, was build ONE test store. Purpose build a full-size Super Target in the best possible location. I'd locate it in Winnipeg not because I live there, but because it's the closest Canadian market to the Target Head Office. Run it not as a for profit business, but as an experiment for what does and doesn't work. Even now, they could close all of the Targets EXCEPT the Polo Park one, and use that to regroup for their next expansion attempt down the road.

[bush_cheney2004]

...What Target should have done, was build ONE test store. Purpose build a full-size Super Target in the best possible location. I'd locate it in Winnipeg not because I live there, but because it's the closest Canadian market to the Target Head Office. Run it not as a for profit business, but as an experiment for what does and doesn't work. Even now, they could close all of the Targets EXCEPT the Polo Park one, and use that to regroup for their next expansion attempt down the road.

Nope....the opportunity that made the previously rejected foray into Canada was/were the Zellers locations and leases, including warehousing. Much cheaper way to get a shotgun launch of 133 stores instead of a long (and more expensive) build-out of new stores at prime locations.

Other American big box stores have failed in Canada, so it is hardly unique to Target. Stockholders and market analysts knew it was shakey over a year ago, and it took a change in CEO to get the right decision to get the hell out now. Target can shift resources to existing, successful store concepts in U.S. markets.

[Bryan]

Nope....the opportunity that made the previously rejected foray into Canada was/were the Zellers locations and leases, including warehousing. Much cheaper way to get a shotgun launch of 133 stores instead of a long (and more expensive) build-out of new stores at prime locations.

It wasn't cheaper, they lost billions of dollars. Most of the existing leases were for buildings and locations that were not suitable for Target. Attempting to come in that way was pure stupidity from the start.

Other American big box stores have failed in Canada, so it is hardly unique to Target.

What big ones have failed? A few that had very few really small stores and were already in trouble in the US, sure. But Big Box outlets? None that I can recall. Target's failure really is unique in that they did everything wrong right from the beginning, and displayed an astounding level of incompetence at every turn.

[bush_cheney2004]

It wasn't cheaper, they lost billions of dollars. Most of the existing leases were for buildings and locations that were not suitable for Target. Attempting to come in that way was pure stupidity from the start.

It was cheaper...they would have lost even more with a longer term expansion in brand new construction. It was a fast gamble and they lost.

What big ones have failed? A few that had very few really small stores and were already in trouble in the US, sure. But Big Box outlets? None that I can recall. Target's failure really is unique in that they did everything wrong right from the beginning, and displayed an astounding level of incompetence at every turn.

Big Lots tried the same thing with Liquidation World in Canada (about 70 stores with dreams of 150). Failed after two years. Best Buy struggles on...Sears Canada is doomed. Sony Stores...Radio Shack....Sam's Club....K Mart.

http://www.torontosun.com/2015/01/15/us-retailers-that-failed-in-canada

Edited January 17, 2015 by bush_cheney2004

[Bryan]

It was cheaper...they would have lost even more with a longer term expansion in brand new construction. It was a fast gamble and they lost.

Wrong. One good store vs 133 really bad ones. They would not have lost more. It wasn't a gamble, it was incompetence.

Big Lots tried the same thing with Liquidation World in Canada (about 70 stores with dreams of 150). Failed after two years. Best Buy struggles on...Sears Canada is doomed. Sony Stores...Radio Shack....Sam's Club....K Mart.

Exactly what I said, SMALL stores with very few locations, with a head office that was in trouble in their original market to begin with.

I've never heard of Big Lots, we never got any. Liquidation World we did have, but it was VERY small, and and barely a step above Salvation Army -- old, used, damaged, CRAPPY stuff only. Looked like a church basement rummage sale. Seriously. I've never seen a Sam's Club in Canada. They repeatedly announced they were opening them here, but never actually did. What they "closed" were empty lots that had nothing there in the first place. The K-Marts continued on when the US company filed for bankruptcy -- Hudson's Bay bought them. Sears is in trouble, for sure, but they had been doing well for 70 some years, that's hardly a failed experiment, it's just at the end of it's life (just as Sears is in the US).

None of those Canadian locations you listed were even remotely close to being "big box" stores. You could fit 20 of them inside an average Costco or Ikea. Any of the real big boxes that I've seen come here have been very successful.

[bush_cheney2004]

None of those Canadian locations you listed were even remotely close to being "big box" stores. You could fit 20 of them inside an average Costco or Ikea. Any of the real big boxes that I've seen come here have been very successful.

Clearly you do not have experience with all those retailers, but the larger point remains: U.S. retail failures in Canada are not rare...not even close to being rare, and that includes "big box" stores. Glad Target got out after wishing they had never gone into Canada.

Target screwed it up, and has now cut its losses. Canadians who want the Target experience will do as they have always done...cross the border.

[Topaz]

SEARS, has announced it will offer jobs to anyone who worked for Target, even management. I was surprised to see Target give workers 16 weeks of severance when they only had to give then 2 weeks.

[Bryan]

SEARS, has announced it will offer jobs to anyone who worked for Target, even management. I was surprised to see Target give workers 16 weeks of severance when they only had to give then 2 weeks.

I wonder if they are looking at this as an opportunity to re-establish themselves. It would be pretty funny if they moved into the failed Target locations. The American Sears Holdings actually owns a majority stake of Sears Canada now. Sears Holdings also owns K-Mart -- they could be looking at making a comeback with that brand. Most of the former Zellers locations were K-marts in the first place.

[Argus]

Sometimes less is more.

And sometimes, as with Target Canada, less is just... less.

[Argus]

I wonder if they are looking at this as an opportunity to re-establish themselves. It would be pretty funny if they moved into the failed Target locations. The American Sears Holdings actually owns a majority stake of Sears Canada now. Sears Holdings also owns K-Mart -- they could be looking at making a comeback with that brand. Most of the former Zellers locations were K-marts in the first place.

The American Sears was bought by a hedge fund a few years ago which has been busy gutting it in order to pay itself huge dividends. In a few years Sears will have to declare bankruptcy, and then the hedge fund will move on and buy some other large organization and suck all the assets of them in turn.

[Argus]

If anything these locations weren't large enough. No room for full service groceries.

Exactly. I was having lunch today with a couple who remembered when Wal-mart came to town and bought a former Woolco location at their mall. It was smaller than their big box stores so Wal-mart adjusted accordingly. For one thing, since it was in a mall with a big grocery store they did not offer a grocery section.

[Argus]

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

That's nice. Wal-mart is doing much the same all around the world.

Target, it looks like, does not see itself capable of expanding outside the borders of the US.

[Argus]

It was cheaper...they would have lost even more with a longer term expansion in brand new construction. It was a fast gamble and they lost.

Big Lots tried the same thing with Liquidation World in Canada (about 70 stores with dreams of 150). Failed after two years. Best Buy struggles on...Sears Canada is doomed. Sony Stores...Radio Shack....Sam's Club....K Mart.

K Mart was successful for many years. It failed for the same reason Woolworth and Woolco and Zellers failed, people stopped going to mid-sized department stores and turned to the big boxes instead. Best Buy is struggling here, but it's struggling just as much there. Sears is doomed in the US, never mind Canada. Radio Shack declared bankruptcy in the US, not Canada. Then when it resumed operations there, having sold off its profitable Canadian branch, it had to sue them to order them to change their name. So all the Radio Shack stores in Canada became The Source stores instead.

[bush_cheney2004]

It's all good.....my TGT stock is way up for the year...who needs Canada ? Let some other suckers buy/lease this golden opportunity, maybe even Canadian capital instead of another American expansion. What a concept !

[Bryan]

U.S. retail failures in Canada are not rare...not even close to being rare, and that includes "big box" stores.

Retail failures anywhere are not rare.

Still waiting for an example of a big box failure. Even most of the Target locations in Canada were far too small to be called that.

Ikea, Costco, Home Depot, Lowes, THOSE are foreign big box outlets. And they did it right -- a few stores at a time, the right size in the right location, only expanding when each existing store reached expectations, and the distribution was in place to handle the expansion.

And Canadian stores that used to be smaller that became Big box are also doing very well. Canadian Tire and Loblaws in particular have expanded tremendously and have been very profitable in doing so.

The issue is not and has never been Canada vs US economic conditions. Well run businesses have success on either side of the border, poorly run ones don't.

[bush_cheney2004]

....And Canadian stores that used to be smaller that became Big box are also doing very well. Canadian Tire and Loblaws in particular have expanded tremendously and have been very profitable in doing so.

Name one Canadian "big box" retailer that has done very well in the United States. Walmart bought 120 crappy Woolco locations, just like Target bought crappy Zellers, and pumped a lot more money into the expansion.