Target Closing Down all 133 stores

[MoreTrains]

So this happened:

(Bloomberg) -- Target Corp. will abandon its operations in Canada after less than two years, putting an end to a mismanaged expansion that racked up billions in losses.

The Canadian business is seeking court approval to begin liquidiation, the Minneapolis-based retailer said today in a statement. The move will lead to a $5.4 billion writedown.

This is the first major strategic shift made under Chief Executive Officer Brian Cornell, who took over for Gregg Steinhafel last year. Steinhafel had seen Canada as burgeoning market for Target, the second-largest U.S. discount chain, because so many Canadians already knew the brand and would cross the border to shop at American stores.

Fixing the Canada unit, which amassed more than $2 billion in operating losses since 2011, has been a top priority for Cornell. After taking the reins in August, he spent a portion of his early days at the company touring operations in Canada. The woes plaguing the company’s 130 stores there ranged from empty shelves to prices being higher than locations in the U.S.

“We were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021,” Cornell said today. “This was a very difficult decision, but it was the right decision for our company.”

Target announced its foray into Canada in 2011 with the purchase of 220 locations from Zellers Inc., a subsidiary of Hudson’s Bay Co., for about C$1.8 billion. The deal cemented the chain’s first expansion outside the U.S., where it had about 1,750 stores at the time.

Target’s shares have rebounded since taking a hit following a data breach during the 2013 holiday season. The stock had gained 21 percent to $74.33 over the past 12 months through yesterday.

To contact the reporter on this story: Matt Townsend in New York at [email protected] To contact the editors responsible for this story: Nick Turner at [email protected] Niamh Ring

http://www.msn.com/en-ca/money/topst...cn5k?ocid=iehp

[eternallyme]

I only see one Target location in Ottawa - the one on Merivale Road - that can easily be filled by another anchor, and it will likely be filled very quickly and someone else will scoop it easily. That is because its location in a very dense box strip can be filled by just about anyone willing to enter that location, with few opportunities for new development there, so it is a HUGE opportunity potential.

The location on St. Laurent Boulevard has less potential, since it is not in an established area to the same degree, and it is a lower-income area anyway.

Bayshore is a problem in that the mall location is bad for any grocery or box store, yet there isn't a department store that can easily take that place. Place d'Orleans has the same issue to a greater extent (and I am thinking redevelopment there is coming).

Hazeldean and Billings Bridge will likely be dead space indefinitely, although grocery stores could move into the larger spaces.

BIG WINNER: Rideau Centre.

[c_speed3108]

Originally Posted by eternallyme

I only see one Target location in Ottawa - the one on Merivale Road - that can easily be filled by another anchor, and it will likely be filled very quickly and someone else will scoop it easily. That is because its location in a very dense box strip can be filled by just about anyone willing to enter that location, with few opportunities for new development there, so it is a HUGE opportunity potential.

The location on St. Laurent Boulevard has less potential, since it is not in an established area to the same degree, and it is a lower-income area anyway.

Bayshore is a problem in that the mall location is bad for any grocery or box store, yet there isn't a department store that can easily take that place. Place d'Orleans has the same issue to a greater extent (and I am thinking redevelopment there is coming).

Hazeldean and Billings Bridge will likely be dead space indefinitely, although grocery stores could move into the larger spaces.

BIG WINNER: Rideau Centre.

This is definitely a major headache for several land lords. Places like St Laurent or Place D'Olreans...I can't even think what might go there.

[eternallyme]

Originally Posted by c_speed3108

This is definitely a major headache for several land lords. Places like St Laurent or Place D'Olreans...I can't even think what might go there.

I agree. There are other locations elsewhere that they have easy (and the Merivale location is a golden opportunity for the landlord there).

But I posted there are 5 types of locations, and two are in "C" malls, one is in a "B" mall, one is in a borderline "A"-"B" mall that still might have difficulty attracting, and one is an isolated location in a non-desirable area.

[Harley613]

I can't see a second grocery store opening at Hazeldean or Billing's Bridge...but if it happened it would probably be budget stores like freshco or food basics.

As for Bayshore, I'm hoping they gut that top floor and extend the skylights and put in some more small/medium retail. The new expansion feels like a dark cave.

[eternallyme]

Originally Posted by Harley613

I can't see a second grocery store opening at Hazeldean or Billing's Bridge...but if it happened it would probably be budget stores like freshco or food basics.

As for Bayshore, I'm hoping they gut that top floor and extend the skylights and put in some more small/medium retail. The new expansion feels like a dark cave.

Aren't the Target locations larger than the existing grocery stores? Those could just move over...and the existing grocery store is easier to fill as a result (with smaller local tenants).

[lrt's friend]

This is a retail disaster. So we dismantle Zellers for what? Nothing? Are we creating a pseudo monopoly for Walmart in that class of retail?

I never liked the Target store at Billings Bridge. A quarter of the store was dedicated to groceries. Why? I just find stores like Target and Walmart are trying to cover too much territory and for any type of product there is poor selection.

I don't see this a big boon for the Rideau Centre. The Rideau Centre benefits from the new stores and the growing number of condos in the area. But the days of downtown shopping are long gone for most of the city. It is simply too difficult to get there from the suburbs and too expensive to park. And yes, I remember the days when downtown shopping was routine. But traffic has gotten a lot worse over the years.

So what fills the void?

[silvergate]

Originally Posted by lrt's friend

So what fills the void?

Little baby Ikeas

[1overcosc]

Originally Posted by lrt's friend

I don't see this a big boon for the Rideau Centre. The Rideau Centre benefits from the new stores and the growing number of condos in the area. But the days of downtown shopping are long gone for most of the city. It is simply too difficult to get there from the suburbs and too expensive to park. And yes, I remember the days when downtown shopping was routine. But traffic has gotten a lot worse over the years.

There was an era when downtown shopping was the norm for suburbanites' everyday essentials, in living memory? Wow. Given that even Kingston is too big for that to work now, I would have thought it had been at least 50 years since it was normal for suburbanites to go downtown to buy milk.

In any case, in Ottawa, and indeed in all North American cities, downtown shopping is about 1) local needs of the downtown population, and 2) speciality/high-end desires of the whole city.

[phil235]

Originally Posted by lrt's friend

This is a retail disaster. So we dismantle Zellers for what? Nothing? Are we creating a pseudo monopoly for Walmart in that class of retail?

I never liked the Target store at Billings Bridge. A quarter of the store was dedicated to groceries. Why? I just find stores like Target and Walmart are trying to cover too much territory and for any type of product there is poor selection.

I don't see this a big boon for the Rideau Centre. The Rideau Centre benefits from the new stores and the growing number of condos in the area. But the days of downtown shopping are long gone for most of the city. It is simply too difficult to get there from the suburbs and too expensive to park. And yes, I remember the days when downtown shopping was routine. But traffic has gotten a lot worse over the years.

So what fills the void?

I agree with you on your first points. I don't go to Walmart, but the selection at Target never matched the promise.

I don't think your are correct in saying that it is "too difficult" to get to the Rideau Centre from the suburbs. It's all about perspective. There are certainly lots of customers (and particularly younger ones) who make that trip regularly, as evidenced by the sales numbers. The majority of shoppers take transit, but for those of us coming from bigger cities, these complaints about it being too hard to get downtown seem a bit silly. Getting downtown in Ottawa is generally a breeze, paying $3 for an hour of parking is a bargain.

I think suburbanites constantly overestimate the traffic issue downtown, particularly off peak. Driving Merivale Road on a Saturday - now that is too hard for me.

[phil235]

Originally Posted by 1overcosc

In any case, in Ottawa, and indeed in all North American cities, downtown shopping is about 1) local needs of the downtown population, and 2) speciality/high-end desires of the whole city.

Number 1 is on the upswing due to an increasing downtown population. Number 2 will also be, as the Rideau precinct is clearly establishing itself as the primary spot for high end retail.

[1overcosc]

Originally Posted by phil235

I agree with you on your first points. I don't go to Walmart, but the selection at Target never matched the promise.

I don't think your are correct in saying that it is "too difficult" to get to the Rideau Centre from the suburbs. It's all about perspective. There are certainly lots of customers (and particularly younger ones) who make that trip regularly, as evidenced by the sales numbers. The majority of shoppers take transit, but for those of us coming from bigger cities, these complaints about it being too hard to get downtown seem a bit silly. Getting downtown in Ottawa is generally a breeze, paying $3 for an hour of parking is a bargain.

I think suburbanites constantly overestimate the traffic issue downtown, particularly off peak. Driving Merivale Road on a Saturday - now that is a difficult slog.

Perception > reality. Downtown shopping is much easier than people think it is, but people base their decisions on perception. There's several annoying perception factors in place:
1) What I call 'the parking distance fallacy': people, if they can't see the door from where they park, think it's too far. Big box store parking lots in many cases actually means longer walks from car to store than a 2-3 block walk from a parking spot downtown to a store, but because you can't see the door from that parking spot, it's thought to be 'further' and more 'inconvenient.'
2) Price perception issues. People often don't understand the economics of driving. Driving 20km out of your way in stop and go traffic to go to a store with free parking is often not saving any money because the extra driving cost more than offsets the parking cost, but people don't realize this in part because many people don't realize the costs of driving beyond gas (things like wear and tear often don't enter people's minds when determining how much it costs to drive X km)
3) Traffic fallacy: as you said, on Saturdays, traffic downtown is actually more free flowing than traffic on places like Merivale or Innes, but people don't realize this for whatever reason.

Bigger cities raises in an interesting point. People who live in Kingston complain about getting downtown, and anyone from Ottawa just laughs in their face and marvels at how easy it is to get to downtown Kingston from the suburbs and how much free parking you can find only 2 side streets away from the high street. I imagine it's something similar with Ottawa vs. Toronto/Montreal.

[HighwayStar]

Originally Posted by 1overcosc

There was an era when downtown shopping was the norm for suburbanites' everyday essentials, in living memory? Wow.

Milk might be a bit of an exaggeration... but growing up in Winnipeg (and I'm not *that* old ) it was always an adventure to take the bus from my home in a distant suburb to The Bay and Eatons downtown department stores... which had by far the largest selection of stuff in the city.

[Kitchissippi]

MOAR Shoppers Drug Marts!

[drawarc]

So Walmart, Giant Tiger, and Canadian Tire the only large end discount department stores left?

[phil235]

Originally Posted by 1overcosc

Perception > reality. Downtown shopping is much easier than people think it is, but people base their decisions on perception. There's several annoying perception factors in place:
1) What I call 'the parking distance fallacy': people, if they can't see the door from where they park, think it's too far. Big box store parking lots in many cases actually means longer walks from car to store than a 2-3 block walk from a parking spot downtown to a store, but because you can't see the door from that parking spot, it's thought to be 'further' and more 'inconvenient.'
2) Price perception issues. People often don't understand the economics of driving. Driving 20km out of your way in stop and go traffic to go to a store with free parking is often not saving any money because the extra driving cost more than offsets the parking cost, but people don't realize this in part because many people don't realize the costs of driving beyond gas (things like wear and tear often don't enter people's minds when determining how much it costs to drive X km)
3) Traffic fallacy: as you said, on Saturdays, traffic downtown is actually more free flowing than traffic on places like Merivale or Innes, but people don't realize this for whatever reason.

Good points. Particularly number 2. There is almost a pathological aversion to paying for parking amongst a good part of the population, even when the costs are really quite low. I guess it's a question of the immediate outlay of money versus the more abstract idea of operating costs. That isn't likely to change any time soon, as I can't see suburban parking becoming a paid commodity anytime soon.

[MountainView]

Originally Posted by drawarc

So Walmart, Giant Tiger, and Canadian Tire the only large end discount department stores left?

I wouldn't really call Canadian Tire a 'discount' department store.

[Kitchissippi]

Although I was half kidding about the Shoppers Drug Mart thing, I think the Loblaws/SDM conglomerate is powerful and rich enough to set up a new made-in-Canada mid-market department store. They already have a lot of the pieces — Joe Fresh, PC branded housewares, etc. — plus a massive integrated distribution system. Someone give Galen Weston Jr. a call....

[drawarc]

Originally Posted by MountainView

I wouldn't really call Canadian Tire a 'discount' department store.

Ok. I guess Sears Canada would also be an example of that format, though they're in trouble too.

[acottawa]

Not really surprising, although I am a little surprised they went right to liquidation without trying something else first.

Business pages today are obviously being filled with what went wrong articles, but I'm not sure there was ever room for them. Target in the US is the "superstore that isn't Walmart" in a country where a huge population lives in exurbs or rural areas and a lot of people do most of their shopping at superstores.

Canadians mostly live in suburbs and suburban Canadians shop at big box malls where there are lots of "not walmart" options (Loblaws, crappy tire, costco plus more specialized big box stores) and Walmarts are generally nicer than their US counterparts.

St Laurent is a disaster, not idea what could go there it is too close to trainyards and st laurent mall. I could see Walmart taking a crack at a few other locations.