Target puts final Canadian plans in motion
MINNEAPOLIS — Target's entry into Canada is nearing completion, as the company on Friday finalized its real estate transaction with Zellers with the selection of 84 additional Zellers leases, bringing the total number of leases, including an initial group of 105 leases selected in May, to 189.
From this second group, Target has acquired the leasehold interests for 29 locations, the vast majority of which will open as Target stores beginning in 2013. The remaining leases have been or will be sold to other Canadian retailers or back to landlords.
Target's venture into Canada began in January when the company announced that it had agreed to pay C$1.825 billion to purchase from Zellers, a subsidiary of the Hudson's Bay Co., the leasehold interests in up to 220 sites currently operated by Zellers.
“Target is excited to take another meaningful step toward our expansion in Canada,” Target Canada president Tony Fisher said. “We look forward to delivering a superior shopping experience for our guests throughout Canada and building on our strong reputation as a good neighbor and partner in the communities in which we do business.”
Target said it plans to open 125 to 135 stores in Canada, the majority of which will open in 2013, beginning with the first cycle in March and continuing with four subsequent cycles later in the year. The company said it will invest about $10 to $11 million in remodeling each location. Locations for the March 2013 store openings will be revealed in the coming months, Target said, with subsequent opening cycles to be announced throughout 2012.
When Target's Canada stores do open, they will face competition from a number of retailers, including Walmart, which ended last year with 325 stores and has plans to open 40 additional stores this year, bringing its total count by year's end to roughly 333 stores. Walmart is in the midst of a U.S.-style supercenter conversion, so by the end of this year, roughly half of the company's roughly 333 units will be supercenters; and by 2013, the total store count figure should be north of 350 with supercenters accounting for roughly two-thirds of the total, and that’s assuming expansion and conversion activity doesn’t accelerate from the current pace in anticipation of Target’s arrival.