Target to Exit Canada
MINNEAPOLIS-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.