While Target's (NYSE:TGT) Canadian stores were "losing money every day," the company as a whole is "in a very healthy financial position," said CEO and Chairman Brian Cornell in a Q&A on A Bullseye View, Target's insider blog. The discussion, aimed to answer any consumer questions about the company's Canadian exit strategy, addressed that in Canada, the brand had missed the mark from the beginning, "taking on too much too fast."
On Jan. 15, the company announced it would shutter all 133 Canadian stores. Target Canada never recovered from its initial blunders.
"We have been very honest along the way that we had several operational challenges. Our stores struggled with inventory issues and we were not as sharp on pricing as we should have been, which led to pricing perception issues. As a result, we delivered an experience that didn't meet our guests' expectations, or our own. Unfortunately, the negative guest sentiment became too much to overcome," said Cornell.
Cornell went on to add that the decision to close all stores was the best solution. The company had discussed just closing underperforming stores or staying in some provinces but leaving others. But there was no scenario in which Target Canada could have turned a profit until at least 2021.
A fund with $70 million Canadian dollars was established to provide most of the ex-employees a minimum of 16 weeks of wages and benefits during the wind-down period.
What does this mean for the future of the company? Cornell stressed that Target was looking strong as the new year began with great momentum. However, he recognized that there was always work to be done.
"We are encouraged by the early momentum we see in our U.S. business but we know the retail landscape is constantly evolving. At Target, this means we have to thoughtfully focus and prioritize the guest like never before. We need to work in new ways, we need to further invest in our top priorities and make strategic decisions related to expense. In other words, we have to transform our business for long-term growth. And there is no question, we will."
-See this A Bullseye View blog
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