For a time, I lived in Buffalo, N.Y., and I know that going across the border into Canada is not that big a deal.
Once you get used to a different flag, a slightly different currency and backyard hockey rinks instead of swimming pools, it’s not much of a transition at all.
Target Corp., up in Minneapolis along that same Great Lakes stretch, must have thought the same thing. Just make sure to add that extra ‘u’ – flavour, colour, honour, etc. – and learn your metrics tables.
Oh yeah, and don’t say their national Olympics hockey team is a bunch of hosers.
So in the fall of 2013, Target marched into Canada. A year later, like Napoleon’s Russian venture, there was a full and painful retreat.
The details have been told before: inventory issues; a surprisingly high pricing policy; a misreading of Canadians’ loyalty to their national brands. All things a smart retailer would have figured out beforehand … and Target is a smart retailer.
But Target accomplished something else that seems almost impossible: It angered Canadians from the St. Lawrence to the Pacific.
Canadians are so affable they apologize if you bump into them. The expression I’ve heard most often in numerous trips to Canada is “no worries.”
Except they’re not saying “no worries” to Target. They’re saying “see you in court! You hosers.”
It seems that when Target closed 133 stores and said “nothing to declare” on its way back to Minnesota, it left a lot of Canadian landlords holding the bag. You know, the bag with the cute red target on it.
In almost all of its locations, Target simply bought up the leases of Zellers, an out-of-business, Canadian-based discount chain. It was a sweet deal. Target didn’t have to negotiate a bunch of individual leases, just keep the locations that made sense and re-sell the leases that didn’t.
It should have been a win-win for everyone. But win-wins have that annoying little “oops” factor.
Those leases Target acquired still have years left on them. As Target searches for buyers or sub-lessees, the landlords are left with huge empty stores and no control over who their new tenants might be.
Some of the landlords got lease guarantees, but the others must lineup with all the other creditors. Target filed for Canada’s version of Chapter 11 bankruptcy reorganization – protection from creditors as it reorganizes to stay in business. Legal, perhaps, but those creditors question how insolvent Target Canada really is and insist that its parent, Target Corp., is anything but bankrupt.
It’s always tricky for retailers to venture abroad, where languages, customs, habits, economies, climates and lifestyles are often so unfamiliar. But Canada seemed like a slam dunk for Target – or should we say an empty net?
Empty-netters sometimes hit the posts. Target seems to have missed the net altogether. Plus two minutes for unsportsmanlike conduct.
As a journalist, writer, editor and commentator, Steve Kaufman has been watching the store design industry for 20 years. He has seen the business cycle through retailtainment, minimalism, category killers, big boxes, pop-ups, custom stores, global roll-outs, international sourcing, interactive kiosks, the emergence of China, the various definitions of “branding” and Amazon.com. He has reported on the rise of brand concept shops, the demise of brand concept shops and the resurgence of brand concept shops. He has been an eyewitness to the reality that nothing stays the same, except the retailer-shopper relationship.