By Jennifer Schleich
In a move that comes as little surprise, Target announced Thursday morning that the company is closing its 133 Canadian stores, putting about 17,600 people out of work.
The decision comes on the heels of significant operating losses this year and an under-performing holiday season.
“We are unable to find a realistic scenario that would get Target Canada to profitability until at least 2021,” said Target Chairman and CEO Brian Cornell during his statement. That would put Target well beyond its 2017 goal for $6-billion in sales and 80 cents a share.
“This was a difficult decision but it was the right decision . . . we have determined that it is in the best interest of our business and our shareholders to exit the Canadian market,” added Cornell.
The decision was a unanimous one among Target’s board of directors and is expected to cost Target between $500 and $600 million dollars.
“The Target Canada team has worked tirelessly to improve the fundamentals, fix the operations and build a deeper relationship with our guests,” said Cornell. “We hoped these efforts in Canada would lead to a successful holiday season, but we did not see the required step-change in our holiday performance.”
Earlier this year CFO John Mulligan (Aug. 20) admitted the company had made a grave error in judgment when it jumped into the Canadian market with the large-scale opening of 124 stores, but had seemed committed to fixing the problem.
“We bit off way too much, too early,” said Mulligan…