Target to Exit Canada

TargetMINNEAPOLIS-Less than two years after opening its first stores north of the border, Target said it would pull out of the Canadian market, in which it now has 133 stores.

In a company statement, Brian Cornell, chairman and CEO, said, "After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021." Cornell added that "it is in the best interest of our business and our shareholders to exit the Canadian market and focus on driving growth and building further momentum in our U.S. business."

For the nine months ending on Nov. 1, 2014, Target Canada posted an operating loss of $627 million. For the fiscal year ending on Feb. 1, 2014, its operating loss was $941 million.

The statement said Target expects its pretax losses on discontinued operations will total about $5.4 billion in the fourth quarter. The cash costs of discontinuing the Canadian operations are projected at between $500 million and $600 million, most of which will occur in the company's 2015 fiscal year or later, the statement said.

Target also said that, based on its sales performance through November and December, it expects same-store sales for the fourth quarter to increase by 3 percent.

David GillDavid Gill | Senior Editor
dgill@hfnmag.com

David Gill covers home textiles, small electrics housewares, personal-care products, cleaning products, mattresses, consumer electronics and major appliances. He also reports on retailers and writes about the business and financial side of both vendors and retailers. He has more than 30 years of experience in business journalism, and has worked for other publications and websites that cover consumer products from both the manufacturer and retailer sides. His outside interests include sports (he is a big fan of the New York teams and of British soccer), cooking, movies and theater. He occasionally enjoys a good cigar as well.

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