Target has put a plan in place to discontinue Canadian operations, announced the company on Thursday morning, after filing for creditor protection in Ontario Supreme Court.
The company has 133 stores across the country, including a location in Cranbrook, which employs approximately 200 people.
Mike Keogh, store manager for the Cranbrook location, declined to comment on the announcement, however, a company spokesperson said closures will begin in the next four to five months.
“We also don’t yet know when each store will close, but it will vary by store,” said Molly Snyder. “The stores will all likely be closed within 16-20 weeks. And we don’t provide details on specific store locations, but I can confirm that none of the stores were profitable.”
It’s a stark turnaround after only two years in operation, when the company—to much fanfare—announced it was expanding into Canada. The Cranbrook location in the Tamarack Centre opened up on May 7, 2013 after completing renovations in a space previously occupied by Zellers.
“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,” said Brian Cornell, Target Corporation CEO, in a press release.
“After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were undoable to find a realistic scenario that would get Target Canada to profitability until at least 2021. Personally, this was a very difficult decision, but it was the right decision for our company.”
No dates have been provided for store closures, but Target is providing $70 million for 16 weeks of compensation, including wages and benefits, to 17,600 employees across the country.
“The Target Canada team has worked tirelessly to improve the fundamentals, fix operations and build a deeper relationship with our guests. We hoped that these efforts in Canada would lead to a successful holiday season, but we did not see the required step-change in our holiday performance,” said Cornell. “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.”
Target Corporation expects to report roughly $5.4 billion of pre-tax losses on discontinued operations in the fourth quarter of 2014, driven primarily by the write-down of the company’s investments in Canada.