Target Finalizes Canada Real Estate Deal
Target Corporation has selected the final leases it intends to buy from Zellers, Inc., in Canada as it gears up to open stores in the country beginning in 2013.
Target said that it intends to open 125 to 135 stores in Canada. The company announced in January that it would pay about $1.8 billion to take over the leases of up to 220 retail sites previously operated by Scarborough, Ontario-based retailer Zellers. It selected an initial 105 locations in May, including sites in all 10 provinces. The company said that the “vast majority” of those 105 leases will become Target stores.
The Minneapolis-based retailer said Friday that it has finalized its real estate deal with Zellers by selecting 84 additional leases-bringing the total number of leases that it intends to buy to 189.
Of the 84 newly acquired leases, Target said that about a third will open as Target stores beginning in 2013, while the others have been or will be sold to other Canadian retailers or back to landlords. For example, Target sold the rights to 39 leases to Wal-Mart in June. Target said Friday that as part of the deal with Wal-Mart, the company acquired the lease for one of Wal-Mart's vacant properties, which will open as a Target store.
Tony Fisher, president of Target Canada, described the real estate transaction as “another meaningful step toward our expansion in Canada. We look forward to delivering a superior shopping experience for our guests throughout Canada and building on our strong reputation as a good neighbor and partner in the communities in which we do business.”
Target said that it will invest about $10 million to $11 million in the remodeling of each new Target location. The first stores are slated to open in March 2013.
The company has started hiring at its Canadian headquarters in Mississauga, where it reportedly plans to hire 100 new workers by the end of this year before it begins hiring store employees in 2012-with about 150 to 200 people expected to work at each location.
In a separate Friday announcement, Target said that it has entered a long-term wholesale distribution arrangement through which Stellarton, Nova Scotia-based Sobeys, Inc., will supply Target's Canada stores with food and grocery products.
Target serves customers at 1,762 stores and on its Web site. It is Minnesota's second-largest public company based on revenue, which totaled $67.4 billion in its most recently completed fiscal year.