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Liquidation of Target Canada stock to begin in February

By Ken Hanly     Jan 20, 2015 in Business
Target Canada informed its customers that it will begin to liquidate stock from its Canadian stores early in February. Target announced last week it would shut all its 133 stores in Canada soon.
Eric Hausman, the Target spokesperson for Canada, said to CBC: "Nothing definitive yet in terms of liquidation timing [but] we do expect it will begin in about 2-3 weeks." Within four to five months, both its stores and distribution centers in Canada will be history. The chain, owned in the US, will need to move quickly not only to move all its merchandise but fixtures and office supplies.
CBC reporters on the ground saw full stores and even lineups but so far there have been no heavy discounting of goods.The chain has more than 17,000 employees in Canada and the company claims there is a trust fund of $70 million to provide employees severance pay. When the closure was announced Target issued a statement about the fund: "The Employee Trust will provide all eligible Target Canada-based team members with a minimum of 16 weeks of compensation, including wages and benefit coverage for those team members who are not required for the full wind-down period."
Target launched it operations in Canada less than two years ago in March of 2013. Many customers expressed disappointment at the prices which often were not very competitive with competing chains such as Wal-Mart, or Canadian Tire. The chain had problems with distribution as well and shelves were often not well stocked. Mandeep Malik, a retail analyst from McMaster Univerity said: 'I think they overestimated the reception they would get.' In its first year of operation alone the company lost $1 billion. Even though losses were shrinking of late, the chain decided to cut its losses and leave. As recently as last July, the executives at Target spoke of still being committed to staying in Canada.
US retailer Aeropostale, which expanded into Canada a decade ago, is also closing 77 of its Canadian stores. Sam's Club, a division of Wal-Mart, also closed its stores Big Lots, another US chain, closed its Canadian stores in February of last year. Wal-Mart also axed 200 jobs at its Canadian head office last November. Fashion chain Mexx Canada is closing all of its 95 stores in Canada by the end of February.
The liquidation of Target stock is expected to take between 16 to 20 weeks with no returns being accepted. Target estimates closing will cost it about $600 million dollars.
Nordstrom Inc.an upscale US fashion chain opened its first Canadian store in Calgary just last September. In spite of the fact that the Calgary store may be hurt by Alberta's dependence on income from oil, it intends to open new stores in Ottawa and Vancouver.
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