About 17,600 people will likely be out of work after Target Canada announced the closure of 133 stores across the nation.
The closures, announced by Target Corporation on Jan. 15, will affect about 100 employees at the Gates of Fergus store on Tower Street at the south end of Fergus.
Centre Wellington economic development officer Patricia Rutter said she was surprised by the announcement.
“I’m disappointed that they’ll be leaving town,” Rutter said. “It’s a loss of that kind of multi-sector merchandiser here.”
The staff of the Fergus Target were also taken by surprise, learning about the closures at the same time as the public.
“We’re a little upset, but at the same time the employees and staff are rallying around each other and just trying to keep everyone in high spirits, letting the community know that we’re going to miss them because we really have enjoyed our time here with everyone,” said Erin, an employee at the Fergus location who preferred not to use her last name.
Target Canada received approval for protection under the Companies’ Creditors Arrangement Act on Jan. 15 and will contribute $70 million into an employee trust, said Molly Snyder, a Target spokesperson.
All Target Canada employees who remain working for the company until they’re no longer needed in their job will receive at least 16 weeks of compensation, including wages and benefits, she said.
“It was incredibly important to us that we treated them fairly as we looked to exit the country,” Snyder said.
After operating for less than two years in the country, Target decided to close 133 Canadian stores due to the likelihood they would not be profitable in the next six years.
“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,” Brian Cornell, chairman and CEO of Target Corporation, said in a press release.
Target expects to report about $5.4 billion worth of pre-tax losses in discontinued operations in the fourth quarter of 2014, and $275 million this year, as much of the $500- to $600-million cost of shutting down Canadian operations will be borne in 2015 and beyond.
“The team worked tirelessly,” Snyder said. “They worked ‘round the clock to really focus on fixing operations, re-engaging the guests and trying to inspire them to shop again and while we did see improvements, unfortunately they just weren’t enough to really bring the guests back to the stores.”
Snyder cited less than ideal Christmas sales as one of the reasons the company decided to leave Canada.
“In retail [Christmas is] absolutely one of the most important times of year and so we placed significant focus on the results of our holiday and unfortunately they just weren’t enough so we made the hard, but right decision to exit,” she said.
But for Calum McGeachie of Fergus, his hometown store seemed to pick up over the holidays.
“This Target here in Fergus started off really slow and then it seemed like prior to Christmas it got a lot busier, so it’s going to be a big hit to Fergus, that’s for sure,” McGeachie told the Advertiser in the Target parking lot.
For many communities, the Target closures bring to memory the fall of Zellers in 2013, except for one fundamental difference: it appears there are no Target-like department stores ready to swoop in and take over the retail space.
“The problem is there is no other retailer in that sort of mid-size department store right at the moment,” Rutter said.
“I’ve been trying to think of other merchandisers … what we could do with that kind of space, because it is a large store.”
This not only poses a problem for the potential use of the retail space, but it also presents challenges for employees.
When Zellers closed, Rutter said she thought employees were encouraged to apply to Target.
“Most people knew that Target was moving in so it was really just a lag in time for those employees,” she explained.
With Target closing in Fergus, approximately 100 people could be without jobs.
If the space remains part of the retail sector, those individuals could potentially find employment there.
However, at this point, there does not appear to be any pending plans for the building, said Rutter, adding Target held a special place in the community.
“We were one of the first stores that Target opened and I think there was a certain amount of pride in that … and we were one of the first smaller-market stores,” Rutter added.
Kathy Johnson, a Target shopper from Fergus, said she isn’t surprised Target is closing.
“Every time you came over here the parking lot was empty, the halls were empty, you just didn’t see very many people in there at all,” Johnson said.
There is currently no defined timeline for Target store closures, but Snyder said they will remain open throughout the liquidation period and will be closing in 16 to 20 weeks.
Other target stores closing in the Waterloo-Wellington area include: Stone Road Mall in Guelph, Cambridge Centre in Cambridge, Laurentian Power Centre in Kitchener and Conestoga Mall in Waterloo.
