Target (NYSE:TGT) was reportedly planning its Canadian exit strategy last October, more than three months before it filed for court protection from creditors.
And last September, the retailer supposedly spoke with its lawyers as it considered its strategic options, which included leaving the country altogether, according to documents filed this week in the Ontario Superior Court, reported the Globe and Mail.
The new information is important to vendors who are owed money for products they shipped to Target Canada in the 30 days prior to what it reported in the court protection filed on Jan. 15. If Target was aware as early as September that it would slow down operations, its orders to suppliers should have been reduced and vendors should have been notified.
"They did not change their ordering habits at all," Lou Brzezinski, a lawyer at Blaney McMurtry LLP, which represents some of the suppliers, told the Globe and Mail.
The suggestion is that Target avoided giving vendors prior notice while bulking up inventory in the 30 days before the filing to cash in on potential going-out-of-business sales.
Upon filing for protection, Target Canada owed $400 million to suppliers and a large debt to its property firm. The company was years away from making a profit in Canada and the stores were "losing money every day," according to Target CEO and Chairman Brian Cornell.
Target plans to close all 133 Canadian stores by mid-May, starting this week.
-See this Globe and Mail article
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