MINNEAPOLIS — Just days after announcing 2011 U.S. expansion plans, Target announced an acquisition in Canada that will enable it to open between 100 and 150 stores during the next four years.
The company announced that it has agreed to pay C$1.83 billion to purchase from Zellers, a subsidiary of the Hudson's Bay Co., the leasehold interests in up to 220 sites currently operated by Zellers. This transaction will allow Target to open its first Target stores in Canada beginning in 2013.
"This transaction provides an outstanding opportunity for us to extend our Target brand, Target stores and superior shopping experience beyond the United States for the first time in our company's history," said Gregg Steinhafel, Target chairman, president and CEO. "We are very excited to bring our broad assortment of unique, high-quality merchandise at exceptional values and our convenient shopping environment to Canadian guests coast to coast. We believe our investment in these leases will strengthen the surrounding communities, as well as create strategic and financial value for Target stakeholders."
Target said it expects to open 100 to 150 Target stores throughout Canada in 2013 and 2014. The financial returns on these stores are expected to be in line with returns on new Target stores in the United States, resulting in dilution to earnings prior to store openings followed by accretion to earnings in the first full year of store operations, according to the company.
According to Target, its presence in Canada should create thousands of jobs, including several in the initial construction phase and associate positions once the stores are open. The company noted that a typical Target store in the United States employs approximately 150 to 200 team members.