Target Makes Move Toward Canadian Debut

Target Corp. (Minneapolis) is in a deal with Hudson’s Bay Co. (Toronto) to acquire the leasehold interests in as many as 220 sites now operated by Zellers, a unit of the Canadian department-store chain. The deal is worth $1.85 billion and marks Target’s first step toward expanding outside the U.S.

The discount retailer says it plans to open up to 150 locations in Canada in 2013 and 2014. Zellers will sublease the sites from Target and continue to operate them under the Zellers banner for a period of time. Target said it will invest more than $1 billion renovating the leased locations, according to The Vancouver Sun.

Moving north is “the most logical first extension of an international strategy” because Canadians know the Target brand, chief executive officer Gregg Steinhafel told Bloomberg.

Target operates about 1700 stores in the U.S. Last year, the company announced it would focus on international expansion, specifically to Canada, Mexico and Latin America.