Target Corporation announced it plans to discontinue operating stores in Canada through its indirect wholly-owned subsidiary, Target Canada Co. As a part of the process, Target Canada filed an application for protection under the CCAA with the Ontario Superior Court of Justice (Commercial List) in Toronto.

“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 (...) 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 US business”, stated  Brian Cornell, Target Corporation Chairman and CEO.

Target Canada currently has 133 stores across the country and employs approximately 17 600 people. Target Corporation is seeking the Court’s approval to voluntarily make cash contributions of approximately 59 million US dollars into an Employee Trust. Target Canada stores will remain open during the liquidation process.

As a result of the CCAA filing, Target Corporation has determined that Target Canada and its subsidiaries will be deconsolidated from Target Corporation’s financial statements as of the date of the filing.  Target Corporation expects to report approximately 5.4 billion US dollars of pre-tax losses on discontinued operations in the fourth quarter of 2014, driven primarily by the write-down of the Corporation’s investment in Target Canada, along with costs associated with exit or disposal activities and quarter-to-date Canadian Segment operating losses prior to the filing. Target Corporation expects to report approximately 275 million US dollars of pre-tax losses on discontinued operations in fiscal 2015.
          
Based on performance through November and December, Target Corporation now expects to report fourth quarter 2014 US comparable sales of approximately 3%, better than prior guidance of approximately 2%t, driven primarily by increased traffic and stronger-than-expected digital sales.

Target Corporation is an American retailing company founded in 1902 and headquartered in Minneapolis, Minnesota. It is one of the largest discount retailer in the United States, with operations in Canada as well.