The Canadian Target

January 15, 2015 at 11:07 am · Filed under business, Digital and Social Media

I dislike shopping more than life itself (to paraphrase Marilyn Manson), but I was indeed pleased when Target opened a store in between my Canada Line stop and Kwantlen Polytechnic University‘s Richmond campus: No longer would I have to make a special trip to buy pants and shirts!

It was a bit of a strange experience, though, going through the store. To me Target was defined by the American stores my Washington State girlfriend takes me to (all the time): Huge, stocked with practically everything, packed with peppy people. It wasn’t clear what the Richmond Target was trying to be; it always seemed small, understocked, lonely for people, and in some disarray (though I *could* find pants and shirts, and get back out of the store in less than ten minutes).

At any rate, it is closing, along with all of the rest of Canada’s 133 Targets. The company entered the Canadian market only two years ago. According to today’s Vancouver Sun,

Target Corp. is pulling out of Canada after racking up over US$2-billion operating losses in less than two years, a retreat sure to go down as the biggest failure of an American retailer in this country to date.

“Simply put, we were losing money every day,” chief executive Brian Cornell said in a corporate blog post Thursday explaining Target’s decision to close its 133 Canadian stores after determining it would take another six years to turn a profit.

Shares of Wal-Mart’s biggest U.S. rival, which has seen its performance improve on its home turf of late, shot up as much as 8.7% in early trading. The move will lead to a US$5.4 billion writedown this quarter, as well as US$500 million to US$600 million in cash expenses. Still, the shutdown will lead to higher profit by next year, Target said.

The Globe and Mail explains how Target blew it. (I was surprised by Target’s poor online presence. I will have to ask my Digital Marketing students about this in class today!)

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