Target says supply chain 'reset' will help fix Canada woes

Tue Aug 12, 2014 4:06pm EDT
 
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By Solarina Ho and Susan Taylor

TORONTO (Reuters) - Target Corp (TGT.N: Quote) is repairing the supply chain problems it holds largely responsible for last year's botched Canadian expansion and expects to show measurable progress on a turnaround by this fall, its top executive in Canada said on Tuesday.

In its first international expansion, Minneapolis-based Target opened an unprecedented 124 stores and three distribution centers in Canada last year, losing nearly $1 billion as sales fell far short of expectations.

Disappointed shoppers complained of higher prices than in U.S. stores, poor selection, and empty shelves, and distribution center workers told Reuters that poor planning led to supply chain problems that began long before the first store opened.

"With the benefit of hindsight, if we could do it all over again, we wouldn't have opened up that many stores, that many DCs (distribution centers), in that short a time frame. I know that much," Mark Schindele, Target Canada's new president, told Reuters.

"We're now unwinding some of the decisions we made that were based on speed."

Some analysts say that Target, which was also hurt badly by a massive U.S. data breach late last year that involved 40 million payment card numbers, should cut its losses in Canada and either close poorly performing stores or pull out entirely.

Schindele, a 15-year Target veteran who came to Canada in May, said the company is focused on improving all of its stores and would not answer questions about whether any closures are being considered.

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A Target sign is pictured next to one of their stores in Vista, California in this file photo taken April 16, 2014.  REUTERS/Mike Blake/Files