Target Canada missed their Target losing billions
In 1881, native New Yorker George D. Dayton decides to explore the growing Midwest markets.
After years in banking and real estate, Dayton decides Minneapolis offers the strongest opportunities for growth. He purchases land on Nicollet Avenue and forms the Dayton Dry Goods Company–today, known as Target Corporation.
Above is a view of the opening of a new Target store in Canada.
Any new opening attracts the attention mostly to the competition and obviously within that picture are people who fall into this category. Nevertheless, some attraction is always recorded from the real customers who are visiting the store for curiosity.
We will talk about Target in a little while.
Before we do that we would like to go back into history and start by telling you who Zellers was since Target acquired Zellers.
Obviously, by going to Wikipedia you will read that Zellers was founded in 1931 by Mark P. Zeller, and was a major Canadian discount department retailer.
In 1978, Zellers became part of the Hudson’s Bay Company, and during the 1990’s Zellers had approximately 350 stores across Canada.
Zellers was initially the kind of store that sold car parts, appliances, clothing, etc., etc, and very little food, with the exception of some candy and some chocolates.
Close to the end of the last decade , the Zellers man at the top died at a very young age, apparently, according to many he was a very good businessman.
His premature death left a very big vacuum within the organization.
In a desperate move on the behalf of the organization to continue running the company, they decided to hand pick the best men in Canada to assume the task.
One of the individuals they picked was a gentleman named David Mock who was employed for many years by the Weston Organization which includes No Frills, Zehrs, Fortinos, Mr. Grocer, Super Centres, Provigo, National Grocers, and, of course, Loblaws, among others.
David Mock’s experience within the food industry in Canada is the result of many years within the industry.
One should note that the Canadian food industry is a very complicated subject more so than any other part of the world based on the fact that every country has its own eating habits and Canada is populated by many nationalities.
For instance, if you were in Ghana, Africa, the main dish is fou-fou.
If you are in the Azores, one must know the fish business.
On the other hand, Canada is a multicultural country, and the food requirements are very diversified because the population is from every part of the world, it is almost impossible to have one person understand all the aspects of food.
The team of brilliant heads selected the best brains in the field in Canada, David Mock, Mark Foote and Peter Wright to undertake the responsibility to introduce the food division into the Zellers organization.
Following this announcement , David Mock asked Spyros Peter Goudas if he was willing to accept the responsibility to organize the food division since he was the authority of the multicultural society in Canada.
Mr. Goudas arranged meetings with capable people and companies he knew over the years including Gilda Foods, Zi Zi, S & F specializing in European products, Young and Young, Eric Brunetta from International Solutions and others.
It was a combined effort and team work for all the above companies, including personnel like, Rick Tsang, Robert Gimbel, Marc Tate, Jim Papaefthimiou, David Cassidy, Christina Cordivani, Gilles Larrivee (Director of Merchandising for Quebec), Eva Sturm, Ted Ritchie (Planogram Analyst) and many more.
Each of these individuals and companies placed lots of effort to fulfill the obligations and responsibilities and made Zellers a key player in the food industry.
Target organization saw the improvement of the Zellers stores and decided to purchase them hoping to penetrate the Canadian market in 2011.
Three years later, Target failed in a big way and missed their Target losing billions of dollars underestimating the complexity of the Canadian market.
It is not a secret that within the last year alone companies have announced that they have closed or announced intentions to close stores like: Sears, Best Buy, Future Shop, Mexx, Sony Corporation, Smart Set, Jacob’s, Holt Renfrew, Radio Shack, Landmark Baiter Market, White Cat Book Company, Staples, Canadians Big Lots, L W Stores, XS Cargo and the list keeps growing.
With the price of gasoline going down headways, even electric car manufacturers are worried.
The forecast of the Target existence was written on the wall prior to their plunge into the Canadian market and according to many, the question was and still is, how a big corporation could make an error of this magnitude.
Of course, this will set up an example that Target prematurely announces that they will be profitable in the year 2021.
Did they obtain this information from Pythia, the Greek oracle of Delphi,who was widely known for prophecies in ancient Greek history.
In the meantime, what will happen to the 17,000 employees in the stores?
Angella MacEwen, the senior economist at the Canadian Labour Congress, says it could take between six months to a year for the employees to find replacement work, particularly given the cyclical slowdown in the retail sector during the post-holiday season.
Target is pulling out of Canada. The Minneapolis based retailer announced Thursday morning it has filed for creditor’s protection with the Ontario Superior Court of Justice and with tears in his eyes, mentioned that personally this was a very difficult decision but it was the right decision for our company.
The Target CEO Brian Cornell said in one of his statements.
Mr. Cornell do you know what you said? Do you know what you did? Accept the job loss, thousands of suppliers will go into bankruptcy because of you.
It is something called a chain reaction, What will you do about them?
Another question, what about the real estate you are leaving behind?
Each store was big enough to facilitate the landing of a 747 jet airplane.
Who do you think is going to take over these locations?
Most retailers out there are having troubles themselves.
Mr. Target did you ever have a chance to go to the internet, YouTube, MyTube, HisTube and anybody else tube to see the damage that you did to us Canadians?
Please let us know of how you plan to mend the pain and the wounds of the damages you have done to us.
The FlyerMall team.
The above photo is of Marc Tate.
Marc Tate, born in Ontario in 1970, has become a force to be reckoned with in the food industry.
His business savvy began at the very early age of 10 when he began delivering newspapers, went on to landscaping.
He dabbled in finance, macromedia, publishing and finally found a niche in the sales industry.
After a career stint with the firm Ester and Young Canada.
In 2003 he became the assistant to the Lead Buyer at the Hudson Bay Company.
With his drive, focus energy and enthusiasm, he was soon an Associate Category Manager and ultimately Category Manager for Ethnic Foods, Produce, Diary & Frozen Foods, among others for Zellers stores.
Target Canada has seen its fair share of problems. They expanded very quickly – they launched their Canadian stores in March 2013 and already have 133 stores, their Canadian CEO stepped down, they lost almost $1 billion dollars in their Canadian expansion and customers constantly complained about empty shelves and poor customer service.
Last year, they tried to redeem themselves by sending a heartfelt apology to their Canadian shoppers. They also set to improve guest experience by offering price matching with their competitors, new products and promises of full shelves. Unfortunately, it was not enough.
Rumours about the closing started buzzing in the industry around May 2014 and this morning, Target announced they plan to discontinue all Target Canada Operations.
“When I joined Target, I promised our team and shareholders that I would take a hard look at our business and operations in an effort to improve our performance and transform our company. After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021.
Personally, this was a very difficult decision, but it was the right decision for our company. With the full support of Target Corporation’s Board of Directors, we have determined that it is in the best interest of our business and our shareholders to exit the Canadian market and focus on driving growth and building further momentum in our U.S. business,” said Brian Cornell, Target Corporation Chairman and CEO said is a release.
The decision seems like the best, as Target Canada has forecasted a loss of $5.4 billion before tax in their forth quarter for 2014.
Right now, Target Canada employs approximately 17,600 people. They are currently seeking the Court’s approval to voluntarily make cash contributions of $70 million into an employee trust – if approved, Target Canada-based employees will receive at least 16 weeks of compensation, including wages and benefits.
There are no final dates on when we can expect the Minneapolis-born retailer to exit Canada. All we know is that Target Canada stores will remain open during the liquidation process, so expect some major sales soon! We have so many questions we need answers for!