Target to close stores in Canada earlier than planned
In January, Target announced its plans to discontinue store operations in Canada through its indirect wholly owned subsidiary, Target Canada Co. The decision was expected to increase the company earnings for fiscal 2015 and increase cash flow in fiscal 2016 and beyond.
Now, it is being reported that Target is shutting down operations of its 133 Canadian stores a month ahead of schedule.
Target failed to find a realistic scenario that would get Target Canada to profitability until 2021. The liquidation process was intended to end sometime in May or June but it has been moved up to mid-April. The company began its store closures on March 22nd.
Target Canada struck a $2.2 million deal to sell back its intellectual property assets to its U.S. parent company that was approved by the Ontario Superior Court. The deal includes in-store and outdoor signage, 28,000 branded shopping carts, 1,500 checkout lane lights, and 912,000 shopping bags.
With 133 stores closing, as many as 17,600 employees will be laid off. All Target Canada employees will receive a minimum of 16 weeks compensation including wages and benefits coverage.
Target has already closed 23 stores and is expected to close a total of 78 stores by April 2nd.
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