17,000+ Canadians lose their jobs
Target Canada files today for bankruptcy protection in Canada
""most" employees will receive a minimum of 4 weeks in severance"
Actually, the announcement from Target specifies that full time employees will receive up to 16 weeks in severance pay.
From the official news release from Target (USA):
"Upon approval by the Court, the proposed trust would provide that nearly all Target Canada-based employees receive a minimum of 16 weeks of compensation, including wages and benefits coverage for employees who are not required for the full wind-down period."
To lose your job is not great. To receive 16 weeks severance pay after less than two year employment is better than experienced by Canadian workers in most instances when an employer closes its doors.
"they weaseled out from their glorious promises to the workers."
I am certainly not trying to defend Target but let us try to keep things in perspective.
Target puts the severance money for the employees in a trust administered by the Court. If the judge decides that some of that money should go to a creditor or a group of creditors (landlords for example) instead of the employees, Target has no control over the decision. They have nothing to "weasel out of" as they have paid the money meant for the employees.
Hopefully things will work out in such a way that employees will get all the money allocated for them.
Target didn't buy HBC, they bought the Zellers leases that HBC was shutting down. The real losers in this situation beyond the employees and some creditors will be the landlords, I think many of the locations were owned by Rio-Can.
Near me was a big new development that was anchored by Target. Even with Target there it was a horrible design (a mash-up of an enclosed mall with a power centre in a feeble attempt to create a "traditional" street like environment (they ended up with a giant block of concrete which appears from the outside to be nothing more than a parking garage). That development is going to be dead in the water without a prime tenant.
When NRDC Equity Partners acquired the Company in July, 2008, a new chapter in HBC’s history began.
The incoming Board appointed a new leadership comprised of top-notch retailers with proven international experience to marry the Zucker vision of superlative customer service with a clear new direction for HBC and its constituent banners.
And what’s next? Well, as is so often the case with history, perhaps a case of “what goes around, comes around.”
In September 2009 Governor Richard Baker announced that HBC would take the Company public again, which occurred in November 2012.
As for its Canadianness, the Company continues to confine its business to Canada, to operate nationally, to be a major employer of Canadians, to serve Canadians, and, as we have seen so dramatically during the recent Vancouver Winter Olympics, to reinforce Canadians’ vision of themselves and their country. What’s more Canadian than that, eh?
http://www.hbcheritage.ca/hbcheritage/history/people/builders/a-history-of-hbc-ownership
Today HBC is a Canadian public company with shares trading on the Toronto Stock Exchange where everyone can buy them.
http://web.tmxmoney.com/quote.php?qm_symbol=HBC
"why it was so hard for them to duplicate"
Many factors including higher (sometimes much higher) costs of doing business in Canada.
Some factors should have been known to them before planning the Canadian expansion. Target has 37 distribution centres in the USA while only 3 were planned for Canada, covering a larger territory. This suggests much higher distribution costs.
With many suppliers located in the USA, the costs of moving those goods from the manufacturers to the Canadian distribution centres would be higher.
Canadian retail labour costs substantially more than American labour. Higher wages and benefits need to be paid in Canada.
Cost of renting retail space is usually higher, partially because costs of building in Canada are higher than in the USA. Although Target had some benefits from taking over old Zellers leases at "below market" rates, they paid dearly for those leases and their locations were generally not the best. That also explains why Zellers was struggling all those years.
One factor they did not plan for: the much lower value of the Canadian dollar in the last year. Costs of imports from the USA have gone up nearly 20% in three years since they made a decision to move here.
Finally, expectations by Canadian shoppers were too high. They expected the same selection and low prices they saw in the USA when cross-border shopping. Target simply could not meet those expectations.
"special packaging for Canada"
???
The same is true for every country in the industrialized world. An American retailer wanting to expand to Germany (a market double the size of Canada in a much smaller territory) will require packaging in German, etc... Pick your country, pick your languages.
"Special packaging" is a very small - largely irrelevant - factor in the demise of Target. WalMart faces the same packaging requirements and is doing very fine in Canada!
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