Target to buy Zellers stores for $1.8 billion
Postmedia News
Published: Thursday, January 13, 2011
U.S. retailing giant Target Corp. said Thursday it is buying more than 200 Zellers Inc. stores ahead of its much-anticipated arrival in Canada.
The deal with Hudson's Bay Co., which owns Zellers, will see it pay $1.8 billion to acquire the leasehold interests in as many as 220 sites now operated by Zellers.
U.S. retailer Target Corp. TGT.N on Thursday announced plans to enter the Canadian market, taking over leases for up to 220 Zellers stores owned by storied retailer Hudson's Bay Co.
Target said it will now be able to open its first Canadian stores starting in 2013. It plans to open 100 to 150 outlets throughout the country in 2013 and 2014, laying the foundation for what it called a "more robust presence" over time.
Zellers will sublease these sites from Target and continue to operate them under the Zellers banner for a period of time. Target said it will invest more than $1 billion renovating the leased locations.
In June 2010, Target confirmed that it was considering expansion into Canada and other international markets, but did not confirm where it would open stores.
Hudson's Bay said in a statement Thursday that it was also anticipated that a number of Zellers locations will be assigned to other retail enterprises.
Zellers, which first opened its doors 80 years ago, was purchased by Hudson's Bay in 1978.
Meanwhile, Steinhafel said Target's chief marketing officer, Michael Francis, will lead the company's move into the Canadian market.
"Under Michael's leadership, Target has emerged as one of the most recognizable brands in the world and I am pleased that he will guide our expansion into Canada," Steinhafel said in a statement.
- With files from Reuters/Financial Post