Why Target is Raking Up Its Maple LeavesIssue 01-26-15 |
In 2011, Target decided to expand its chain of stores to Canada, where it had 133 locations by 2015.
The Canadian operations were not profitable, however, posting losses of around $2 billion. Part of the problem was supply chain management and getting the right goods to the right stores at the right time. Another aspect was pricing and positioning relative to other retailers in the Canadian market, where Canadians' perceptions of Target (based on what they knew about the U.S.-based chain and their experiences shopping south of the border) did not match with what they experienced in the new Canadian stores.
Target's new CEO, Brian Cornell took a week-long trip through Canada recently, evaluating options for the company's Canadian operations. The conclusion: Shut down Canadian operations and take a $5.4 billion write-off.