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Target Corp. made the surprise decision Thursday to walk away from an ill-fated expansion into Canada, taking a $5.4 billion write-down and placing its 133-store Canadian operation into bankruptcy after some well-publicized operational blunders tarnished the brand among consumers, according to Law360.
The one-stop-shopping behemoth, which has stayed resilient during a dark period for retail that has snuffed out smaller competitors, announced that it would place its money-losing Target Canada Co. into bankruptcy in Ontario for protection from creditors while it winds down, an ignominious end to a disastrous cross-border expansion.
The move means the likely loss of some 17,600 jobs and brings Target’s $4 billion push into Canada to a close after less than two years.
“While apparently isolated to the overexpansion of Target in Canada without the necessary supply line and data entry systems in place, the store closings and the loss of more than 17,000 jobs demonstrates the fragile nature of many segments of today’s retail operations,” says Bankruptcy expert Chuck Tatelbaum of Tripp Scott.
“Given the magnitude of Target Canada’s closings, the impact on its suppliers, creditors, service providers and employees will create a significant negative impact by way of a domino effect that will create hardships and losses for hundreds, if not thousands, of local, national and multi-national businesses that are creditors of Target Canada,” says Tatelbaum.
