Yahrtzeit for Target (Addendum): A Reading List

27 Apr

Target’s public relationship with Canada lasted about 4 years to the day, the average length of an Elizabeth Taylor marriage, with the announcement of its arrival January 13, 2011 and the announcement of its departure, January 15, 2015.

Here’s a trip down memory lane.

Note that all links worked when this post was originally written but because external sites change, might not be active when you try to visit them.

High hopes The Announcement Day: January 13, 2011 Target buys Zellers leases for $1.8B

Met with

“When is Target going to buy Zellers and come to Canada?” has been the most-asked question posed to this reporter over the years at the office water cooler and at parties — it seems most consumers who have visited the cheap chic Wal-Mart rival as it successfully expanded across the U.S. prefer its cheap chic stylings to that of Zellers. (Close behind in popularity: “When is J Crew coming to Canada?” That is supposed to happen at a mystery location in Toronto later this year. Stay tuned!)

Saw some early problems: Starting with another store that named itself Target in anticipation of the moment:

Commenting on Target’s arrival, one American retail analyst commented that Canadians have “had so many lousy retailers like Zellers and all these crappy guys. You’ve had all these dumps who acted like retailers but really were cadavers,” Mr. Davidowitz said.

2012 Excitement builds Emerging Designer Award winner’s collection for its Quebec stores; Toronto Fashion Incubator’s New Labels contest winner gets cross-Canada exposure 
Flash forward to 2015  
2013 Opening day—and already sensing problems In this interview with then Target Canada president Tony Fisher (Why Canadians are paying more at Target), Globe and Mail retail reporter Marina Strauss focuses on the already noticeable differences in prices between Target Canada and Target USA.

Here are my 2013 notes on this article:

“Geez this guy sounds culturally limited. Look at the comments on Halifax, as if the interviewer—a Canadian—had no knowledge of it.”

 

2014 Anticipating the unthinkable By Fall 2014, rumors started to swirl that Target was considering exiting Canada—many in response to analysts suggestions that Target high-tail it back to the USA.

However, the retailer expanded aggressively in the region without setting up an effective supply chain to supplement its needs. Due to Canadian packaging laws, protectionist tariffs on certain food products and exclusive wholesale agreements, Target’s U.S. network cannot serve its Canadian business. Hence, the retailer had established a fresh supply chain network for Canada, which wasn’t too efficient.

Due to this, customer response to Target was much worse than the cheap chic retailer expected, which resulted in low store traffic and subsequently, heavy markdowns.

 

2015 Continuing to anticipate the unthinkable Why Canada Is Giving Target Heartburn

 

The unthinkable happens
Instant answers Within days of the departure—and for weeks afterwards—many offered their explanations of Target’s demise. Each offered a unique insight but they all tended to focus on the same general  issues (analyses posted in chronological order):

Looking every bit the hasty exit Target Canada sped up its exit as quickly as possible, leaving unpaid suppliers, miffed landlords, and an angry public in its wake:

Noticing the human toll of the exit Target employed 17,600 workers in Canada and a few hundred more in its headquarters in the US. In addition, several suppliers relied on Target for sizeable percentages of their businesses. Some reporters explored this human toll to the loss:

Becoming a messy exit, too Some of the most serious long-term problems arising from the Target exit appeared a few months after the last store closed. A number of the problems arose from difficulties in re-leasing the former stores, most of which were slow to find new tenants (and are still unoccupied); others arose from unpaid creditors.

Leaving some lasting lessons
Target is recovering As embarrassing as the Canadian exit might have been and as angry as it left Canadians, it also left Target free to focus on fixing its larger problem: its lackluster American operations that were still reeling from the massive data breach in 2013 and a multi-year sidetrip into groceries that resulted in “dulling” the rest of the store and its merchandise.

And the inside story starts to emerge About a year after announcing closing: January 21, 2016 The Last Days of Target, which provides an insider’s story of how Target veered so off-track in Canada, starting with an almost impulsive purchase of Zellers’ leases which, in turn forced an accelerated launch in Canada as well as an ill-advised and ultimately business-ruining choices about inventory and point-of-sale technology and, for good measure, skimping on training. Its otherwise engaged and committee workforce didn’t stand a chance.

 

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