Thin crowds during CEO's visit helped seal Target Canada's demise
By Nathan Layne and Solarina Ho
NEW YORK/TORONTO (Reuters) - Target Corp (TGT.N: Quote) was scrambling for ways to fix its failing Canadian expansion and considering closing just the weakest locations, but a pre-holiday visit to several stores by CEO Brian Cornell helped seal the decision for a full retreat.
Cornell spent the weekend before Christmas making solo visits to stores in Ontario and Quebec, Canada's most populous provinces, according to a Target source familiar with the U.S. discount retailer's decision to pull out of Canada.
Though the recently appointed chief executive could see signs of operational improvements - notably, better stocked shelves - a key ingredient was missing.
"There just weren't enough people in the stores," the source said. "The weekend before Christmas our stores are usually packed. He wasn't seeing enough people. The stores he visited had never looked better, they were in stock, but there weren't enough people there."
Target said on Thursday it will exit the Canadian market after less than two years, closing 133 stores, throwing more than 17,000 employees out of work, and leaving billions in losses.
A former Target employee in touch with vendors and existing staff at the Canadian headquarters said everyone was blind-sided by the decision, especially by the timing.
Target, which entered Canada hoping it would be profitable after the first year, had invested more than C$7 billion ($5.84 billion) in its Canadian expansion since the start of 2011, according to its Companies' Creditors Arrangement Act (CCAA) filing.
But it wildly overestimated how readily Canadians would embrace its arrival. A laundry list of missteps at all levels of the operation left shoppers disenchanted. Continued...