Sunday, January 16, 2011
Target To Open in Canada
As I first reported back in October (and my fellow blogger The Recessionista confirmed last week) Target is finally coming to Canada. Target has officially announced plans to open 100 to 150 stores in Canada in a two-year period starting in 2013.
The fast-paced expansion comes courtesy of a $1.85 billion deal for Target to acquire leasing interests in up to 220 stores in Canada from retailer Zellers Inc., a subsidiary of the Hudson Bay Company. Zellers will lease the stores back and keep its name on the stores for a period of time during the transition. Zellers is Canada's second-largest mass-merchandise retailer, with more than 270 stores. The company was founded in 1931 by Walter P. Zeller as "stores for thrifty Canadians."
The deal marks the first time Target has made any substantial growth plans since the start of the recession. Last year it opened just 10 stores and this year expects to open 21. That's down from a roughly 100-store a year pace the company had been on before the economy turned sour.
"This transaction provides an outstanding opportunity for us to extend ... beyond the United States for the first time in our company's history," said Gregg Steinhafel, Target's chief executive. Target currently operates 1,752 stores nationwide.
But in an interesting twist, Target may have to operate under a different name in Canada. There is already a discount menswear chain operating in Canada as "Target Apparel", which means Target may have to choose between using a different name there, buying the Canadian rights to the Target trademark, or face a lawsuit, depending on what happens in a fight over ownership of naming rights.