Target aims for Canada with $1.83 billion takeover of Zellers

Zellers stores across Canada will disappear in a couple of years, as major U.S. retailer Target moves in.

Target is spending $1.83 billion to buy up the leasehold interests in 220 Zellers stores from the storied Hudson’s Bay Company.

The deal appears to be a lucrative one for U.S. owner Richard Baker who bought the Hudson’s Bay Co. in 2008 for just $1.1 billion. “This transaction provides attractive long term value and will allow us to invest substantial capital into our department store and specialty store businesses to continue to drive growth,” said Baker in a release. Baker’s company NRDC Equity Partners also owns high-end fashion retailer Lord & Taylor.

Though Target said the Zellers brand won’t disappear immediately, the deal is the first step in a plan to open between 100 to 150 Target stores by 2013.

According to the Globe and Mail, the remaining Zellers stores will be auctioned off to other, potentially international retailers like Kohl’s and J.C. Penney.

Target, which helped coin the phrase “discount chic,” has long been exploring opportunities north of the border.

However it hit several roadblocks that run the gamut from unattractive real estate locations for potential stores to the economic slowdown that reined in consumer spending.

Target said that under the agreement Zellers will continue to lease the locations from Target and run them as Zellers stores “for a period of time.”

Brands Articles

The bear necessities of Freedom’s rebranding

With a new name and mascot, a challenger telco takes a softer approach

Air Miles backtracks on points cancellation plan

LoyaltyOne says legislative 'uncertainty' drove decision

Ethnic retailing is moving from niche to mainstream

Canadian consumers are changing, but too few retailers are paying attention

Telling Canadian writers’ stories

The Juggernaut's series for the Writers Guild of Canada makes the case for our culture

Increased demand drives Grocery Gateway’s growth

Longo's CEO says online grocery shopping has 'come of age'

Canadian Olympic Committee signs with Sid Lee

COC signs with new agency of record until 2020 Tokyo Games

Luxury retail must go digital or be forgotten (column)

AJ Dalal says luxury retail ignores the connected shopper at its peril

Carlsberg picks Ogilvy as AOR

The agency wins all of the brewer's brands in Canada, including Kronenbourg and Somersby.

Localize labels talk to consumers about food sourcing

QR codes and a scoring system tell Ottawa shoppers where they're buying from