Target Speeds up its Exit From Canada, Plans A Mid-April Shut Down
MINNEAPOLIS, MN - Target has decided to close all 133 of its Canadian stores one month faster than the company had originally planned.
In a court filing released this past week, Target has announced that after taking 26 months to launch its first Canadian stores, the retailer will be exiting the country, “as early as mid-April,” which is about a month ahead of schedule.
“It is anticipated that the pace of delivery of Vacate Notices by the [liquidation] agent will continue to increase over the next two weeks, such that all stores are expected to be closed to the public as early as mid-April, 2015, which represents a significant achievement,” says Court-Appointed Monitor, Alvarez & Marsal Canada Inc.
As we’ve previously reported, Target announced in January that it was making plans to leave Canada after disappointing holiday retail numbers and the continual loss of profits.
17 stores have already ceased operations in the middle of March, according to The Financial Post. Another six Target locations will shutter on March 30 while 23 are slated for closure on April 1, and 32 more on April 2.
Target’s lawyers have been working with the courts to solidify the details, and a variety of creditors are pressing the company for more information.
According to the Business News Network, suppliers are working to convince Target to give creditors precedence to get their hands on $1.9-billion of inter-company debt that Target owes one of its own divisions. Lawyer Lou Brzezinski of Blaney McMurtry LLP, who represents some of the suppliers, said in a filing this week he wants to cross-examine Brian Cornell, Chief Executive Officer of Target Corp, if information isn’t forthcoming from Target Canada.
“In our view, it makes the most sense for [Target Canada] and Target Corporation to also produce the CEO of Target Corporation, Brian Cornell, for examination, particularly given that Target Corporation enjoys the benefit of protection of its derivative liability from claims made against” Target Canada,” Brzezinski said.
The court has been asked to approve a $2.2 million deal in which the company would buy an array of items from its Canadian division, according to the Business News Network.
Other goods that Target wants to buy include: 28,000 of its signature red shopping carts, 12,600 shopping baskets, 912,000 bags, 1,500 checkout lane lights, various store signs, fixtures, and “spider wrap and keys” electronic security devices, as well as merchandise from its bull’s-eye boutique, such as mugs and yoga bags.
In addition to the sales price, Target Canada believes it will save an extra $1.9 million by shifting the responsibility for removing and disposing of the branded items over to Target Corp.