Target Corp. is pulling out of Canada after racking up over US$2-billion operating losses in less than two years, a retreat sure to go down as the biggest failure of an American retailer in this country to date.
“Simply put, we were losing money every day,” chief executive Brian Cornell said in a corporate blog post Thursday explaining Target’s decision to close its 133 Canadian stores after determining it would take another six years to turn a profit.
Shares of Wal-Mart’s biggest U.S. rival, which has seen its performance improve on its home turf of late, shot up as much as 8.7% in early trading. The move will lead to a US$5.4 billion writedown this quarter, as well as US$500 million to US$600 million in cash expenses. Still, the shutdown will lead to higher profit by next year, Target said.
Minneapolis-based Target, which employs 17,600 people, is seeking court approval to begin liquidation.
“This was a very difficult decision, but it was the right decision for our company,” Mr. Cornell said.
By Hollie Shaw