Home / Knowledge / News / Apparel/Garments / Target to discontinue operating stores in Canada
Target to discontinue operating stores in Canada
16
Jan '15
Target Corporation has planned to discontinue operating stores in Canada through its indirect wholly-owned subsidiary, Target Canada Co. (‘Target Canada’), and has filed an application for protection under the Companies’ Creditors Arrangement Act (CCAA) with the Ontario Superior Court of Justice (Commercial List) in Toronto.
 
“When I joined Target, I promised our team and shareholders that I would take a hard look at our business and operations in an effort to improve our performance and transform our company. 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,” said Brian Cornell, Target Corporation chairman and CEO.
 
“Personally, this was a very difficult decision, but it was the right decision for our company. With the full support of Target Corporation’s Board of Directors, we have determined 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 US business,” Cornell added.
 
Target Canada currently has 133 stores across the country and employs approximately 17,600 people. The company has sought approval of the court to create a Trust with a corpus of C$ 70 million (approximately US$ 59 million) from which all employees receive a minimum of 16 weeks of compensation, including wages and benefits coverage for employees who are not required for the full wind-down period. Target Canada stores will remain open during the liquidation process.
 
“There is no doubt that the next several weeks will be difficult, but we will make every effort to handle our exit in an appropriate and orderly way,” said Cornell.
 
As a result of the CCAA filing, Target Corporation has determined that Target Canada and its subsidiaries will be deconsolidated from Target Corporation’s financial statements as of the date of the filing. Target Corporation’s cash costs to discontinue Canadian operations are expected to be $500 million to $600 million, most of which will occur in the Company’s 2015 fiscal year or later.
 
As a result of the decision, Target Corporation will operate as a single segment that includes all US operations. This is expected to increase the company’s earnings in fiscal 2015 and beyond, and increase its cash flow in fiscal 2016 and beyond.
 
Commenting on Target’s decision to exit Canadian market, Henry Stupp, CEO of Cherokee Global Brands, a global marketer of style-focused lifestyle brands, said historically, Target Canada represented less than 1.8 per cent of total revenues for Cherokee, and hence the company anticipates minimal, if any, impact from the closure of Target Canada stores. (RKS)
 

Fibre2fashion News Desk - India


Must ReadView All

Courtesy: Fancycrave.com from Pexels

Apparel/Garments | On 22nd Jun 2018

EU's retaliatory duty on US apparel takes effect

As part of the three-pronged response outlined by the European...

NCC applauds House passage of farm legislation

Textiles | On 22nd Jun 2018

NCC applauds House passage of farm legislation

The National Cotton Council (NCC) of the US has welcomed the passage...

Courtesy: Roman Pohorecki from Pexels

Apparel/Garments | On 22nd Jun 2018

UK launches inquiry on sustainability of fashion industry

The Environmental Audit Committee of the UK Parliament has launched...

Interviews View All

Yash Agarwal
Hitansh Online

Every market region has its own culture and trends

Marazban F Velati
Sutlej Textiles & Industries limited

No training can be effective till the candidate believes in it.

Anvita Mehra
Confidential Couture

‘It is going to take some time for Indian buyers to get accustomed to...

Kamal Kulshreshth

Colorjet is among the fastest-growing wide format digital inkjet print...

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Vikas Banduke

Softech Controls Private Limited (SCPL) is a part of the Cotmac Group, an...

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Aditi Somani
Aditi Somani

Aditi Somani specialises in luxury fusion wear with international cuts and ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


June 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search