Target to close 133 stores and cut 17,000 employees across Canada

Target Corp. will abandon its expansion into Canada just less than two years after its launch, the U.S. discount retailer announced Thursday. The company said it expects to report about $5.4 billion in pre-tax losses for its fourth quarter, which finishes at the end of January, mostly due to the writedown of the Canadian investment, along with exit costs and operating losses, though investors appeared happy with the planned move as share rose 3% in morning trading.The company said it will seek court protection from creditors in Canada for the money-losing subsidiary.

Unfortunately, we were unable to find a realistic scenario that got Target Canada to profitability until at least 2021… The losses were just too great.

Target Chief Executive Brian Cornell

While some analysts had called for a complete exit from Canada so Target could focus on U.S. operations, many had expected a more measured approach, with the company closing the poorest performing stores as it assessed long-term goals. While the stock rose on the news, the failed expansion bodes poorly for Target’s long-term growth prospects, given it could not succeed in an neighboring country with the same language, one observer said.

There isn’t a bigger implosion and it needs to be really understood this it’s entirely their fault.

Jim Danahy, director of the Center for Retail Leadership at York University’s Schulich School of Business in Toronto

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