Target Canada

Target Canada Co.

Type	Subsidiary
Industry	Retail
Founded	2011
Headquarters	Mississauga, Ontario
Number of locations	125 to 135 planned[1]
Area served	Canada
Key people	Tony Fisher[2] (President)
Parent	Target Corporation
Website	Target.ca

Target Canada Co.^[3] is the Canadian subsidiary of United States-based discount department store chain Target Corporation, formed in 2011 to oversee the company's Canadian operations.

Target announced on January 13, 2011 that it would be purchasing the leaseholds of up to 220 locations currently operated by Hudson's Bay Company's Zellers discount store chain, and that it planned to open Target stores in Canada using many of these sites starting in 2013.^[4]

Background

Regular rumours would surface suggesting that Target was interested in expanding into Canada by acquiring Zellers outright. In January 2010, Target publicly indicated long-term plans to expand internationally, likely including Canada, but that those plans would not take effect until 2013 at the earliest.^[5]

Acquisition of Zellers leaseholds

Target Sale Timeline

January 12, 2011: Agreement signed.[3] January 13, 2011: Announcement of sale. May 26, 2011: Announcement of first 105 site selections. June 24, 2011: Announcement of resale of 39 selections to Walmart. September 23, 2011: Announcement of final 84 site selections.[1] January 31, 2012: Earliest possible date that Target might require some acquired locations to be vacated by Zellers.[3] March 31, 2013: All acquired locations must be vacated by Zellers by this date.[3] 2013 - 2014: Acquired locations expected to re-open as locations of Target or of other retailers.

On January 2011, Target announced that it would purchase the lease agreements of up to 220 Zellers stores for C$1.825 billion.^[6] Under the agreement, Zellers will initially sublease the properties, and continue to operate them as Zellers locations until at least January 2012 and at latest the end of March 2013.^[3]

In late May 2011, Target announced its first 105 selections, including at least one selection in each province. The company has stated that the vast majority of locations in this first group will be converted to Target.^[7] In September 2011, Target announced 84 additional selections, bringing the total number of leases, including an initial group of 105, to 189. The first store opening cycle will be in March 2013, followed by four additional cycles later that year. For locations that will be converted, the majority will be closed for at least six to nine months as they undergo significant remodeling.^[8]

After the Zellers stores at these locations close, Target will renovate between 125 and 135^[1] of them, and reopen them under the Target banner. Target expects to transfer the remaining acquired locations, numbering between 70 and 120, to other retailers, including 39 which are slated to be resold to Walmart Canada.^[9] It has been speculated that the remaining locations could be acquired by one or more additional U.S. chains seeking to expand into Canada, such as Kohl's or J. C. Penney.^[10]

Target is not purchasing the Zellers chain outright. Approximately 50 to 60 existing locations will be retained by HBC. HBC's current announced plans are to operate the remaining locations as part of a smaller Zellers chain operating in specific communities.^[11]

Target Canada's head office will be located in Mississauga, Ontario at the AeroCentre V complex.^[12]

Target plans to hire thousands of new employees to support its expansion into Canada.^[13]

Target Canada's food and grocery items will be supplied by Sobeys.^[14]

Proposed locations

Contrary to some media reports, Target has only stated so far that the vast majority of the first group of 105 locations it acquired, as well as up to 29 of the second group of 84 locations, will be converted to the Target banner.^[7][15] The company has identified all 189 locations that it is acquiring in press releases, but has not yet confirmed which specific locations will or will not become Target stores. However, Walmart Canada has separately announced the 39 locations (out of the 189) that Target is reselling to that chain; all of those will be converted to the Walmart banner, not Target.^[16]

A number of landlords, including RioCan Real Estate Investment Trust,^[17][18] Primaris Retail REIT,^[19][18] Ivanhoe Cambridge,^[20][18] Homburg Canada REIT,^[21] and the Redcliff Realty Group,^[22] claim to have received assurances that all of the locations on their properties selected during the first phase will open as Target locations, and will not be resold to other retailers. Concurrently, Cadillac Fairview also claims that the Zellers location at the Galeries d'Anjou in Montreal will definitely become a Target store,^[23] but has yet to make a statement on any of its six other shopping centres affected by the transaction. The store directory on Promenades Saint-Bruno's official website has replaced Zellers with Target, possibly suggesting that it will undergo the change as well.^[24] Finally, RioCan has announced that a flagship newly-built Target store will be constructed just west of midtown Toronto, on a RioCan-owned parcel at the intersection of St. Clair Avenue and Weston Road in The Junction.^[25] At present, none of these claims have either been publicly corroborated, or challenged, by Target Canada.

Trademark issues

In the absence of the U.S. chain, a number of Canadian retail companies, without any affiliation to the American company, have made use of the "Target" name for various purposes. For example, a regional variety store chain in Newfoundland and Labrador operated under the Target banner during the 1980s and early 1990s. There has also been a liquor store named Target Liquor in Alberta,^[26] and a Target convenience store chain based in Toronto.^[27]

In advance of its entry into Canada, Target Corporation has attempted to solidify its rights to the "Target" brand name in Canada by buying out the Canadian trademark rights of some these existing users,^[26][27] in addition to filing new applications of its own. However, Target's expansion into Canada could still be threatened by one other party that claims the Canadian rights to "Target" with respect to clothing.

The Canadian trademark "Target Apparel" was registered in 1981 by Dylex Ltd., a now-defunct Canadian retailer, covering "[m]en's clothing, namely suits, pants, jackets, and coats." The rights to the mark were acquired in 2001 by Fairweather Ltd., part of the INC Group of Companies owned by Isaac Benitah.^[28] It appears that Target Apparel originally served as a private-label clothing brand, and not as the name of a retail store; Fairweather would not apply to extend its trademark to cover retail services until April 2011.^[29]

INC Group opened a small Target Apparel retail store adjacent to the company's head office in December 2003.^[29][30] In late 2010, soon after Target's announcement that it planned to expand into Canada (but before the Zellers announcement), INC began expanding the banner to other higher-profile locations, including conversions of some of its existing Labels stores.^[30][31] Target has challenged INC's rights to the Target Apparel trade name on numerous occasions; INC has thus far succeeded in retaining those rights, but faces a further court challenge with a trial set to start in 2012.^[30][32]

References

External links

• Target Canada
• Zellers "Key Points for Customers" re Target deal