|Vittorio Hernandez |||Jan 16, 2015 10:19 AM EST|
(Photo : Reuters) A sale sign is seen inside a Target store in Delta, British Columbia January 15, 2015. Target Corp will abandon its ill-fated expansion into Canada less than two years after launch, putting more than 17,000 employees out of work.
Wrong business strategies made American retail giant Target lose its aim for profits after it entered Canada in 2013.
That would provide Target Canada sufficient time to liquidate its 133 outlets across Canada and pay the workers.
The Globe and Mail report that there were two main reasons why Target failed to hit the bull's eye of the Canadian consumers' pockets.
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These are the high price tags and empty shelves. Throw in as well the lack of an e-commerce site for its Canadian operations and failure to give the Zellers outlets it took over a new look consistent with the Target brand. Instead, the old and familiar red-and-white hues remained.
Brian Cornell, chief executive officer of the parent company of Target Canada, said that since he took over in August, he better understood how deeply the retailer has disappointed the Canadian consumer with their business strategies.
Target's departure would impact a lot of businesses in Canada such as the owners of the 133 outlets who now need to find new tenants. The bigger challenge for these property companies is that many of their locations aren't exactly what other retail tenants are looking for in leased spaces.
Among the potential uses of the Target outlets are spas and call centers.
"Landlords will be working like mad to come up with a 'back-filling' strategy," according to Rick Pennycooke, president of Lakeshore Group, a retail real estate specialist.
But he adds, "It's not going to be easy because there are very few players who will want/need that amount of space."
Industry experts point to Wal-Mart, Canadian Tire Company, Loblaw and Rona as the potential buyers of Target's retail space in Canada.
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