Target’s shot at Canada’s retail market has hit wide of the mark.
After less than two years in Canada, the U.S.-based retailer announced Thursday it’s closing its 133 Canadian stores, including 19 stores across B.C. and one in Nanaimo, putting 17,600 people out of work, including about 130 in Nanaimo.
Brian Cornell, Target Corporation chairman and CEO, said in an online statement the company found no way to make its Canadian operations profitable before 2021.
“In terms of specific stores, we don’t usually break out information on store performance, but I can tell you that none of our stores were profitable,” said Molly Snyder, Target Canada spokeswoman, when asked about the Nanaimo North Town Centre store’s performance.
“We’ve had better days around here,” said Fay Laing, Nanaimo North Town Centre general manager. “It’s a bit of a blow.”
Laing said it’s too early to comment publicly how the mall will adjust to the latest development, but management and marketing staff will review planning for 2015. The mall has three remaining retail anchors in London Drugs, Canadian Tire and Sears.
The Nanaimo region economy’s reliance on retail is about 30 per cent higher than the provincial average, said Sasha Angus, Nanaimo Economic Development Corporation CEO, which contributes about $1.4 billion annually to the local economy.
“We’ve always been a retail hub for the north part of the Island, so those types of jobs and those types of businesses are more prevalent in Nanaimo, compared to the provincial average,” Angus said.
Angus is optimistic Target’s employees will be absorbed into the economy, citing Conference Board of Canada’s economic forecasts indicating a 3.6-per cent increase in retail business for 2014 to be followed by a 4.-per cent rise locally in 2015, with major retailers, such as Cabella’s, moving into the Nanaimo market.
“Hopefully, with improvements in the local economy and an uptick in retail that new retail positions will open up,” Angus said.
Kim Smythe, Greater Nanaimo Chamber of Commerce CEO, said many retail positions are part-time, employees often juggle two or three jobs to make ends meet and Nanaimo is over-serviced by large retailers.
“Is a shelf stocker or a clerk from Target going to be able to knock on the door of Canadian Tire and expect a warm reception at this point, especially in the year? Or Wal-Mart or another major retailer?” Smythe asked.
Target’s corporate website said it will take 16 to 20 weeks to close each store. Employees laid off will receive up to 16 weeks’ wages and benefits.
The company estimates closing Canadian operations could cost $600 million.
For more information, please visit the Target Canada website at http://pressroom.target.ca.
