Target has acquired the Canadian leases for 220 sites currently operated by Zellers, a subsidiary of the Hudson's Bay Company, for $1.8 billion. It represents Target's first foray outside the U.S.
Target will sublease these sites to Zellers for a period of time, until the retailer opens its first stores in Canada beginning in 2013.
Target, which currently operates more than 1,700 stores in the U.S., plans to open 100 to 150 Target stores throughout Canada in 2013 and 2014. The financial returns on these stores are expected to be in line with returns on new U.S. Target stores.
"This transaction provides an outstanding opportunity for us to extend our Target brand, Target stores and superior shopping experience beyond the United States for the first time in our company's history," says Gregg Steinhafel, chairman, president and chief executive officer of Target Corporation. "We are very excited to bring our broad assortment of unique, high-quality merchandise at exceptional values and our convenient shopping environment to Canadian guests coast-to-coast."
Target expects to create thousands of jobs for Canadians through store renovations, expansions and new construction as well as subsequent store operations. As the company expands its presence in Canada, it will extend its commitment to donate 5 percent of its revenue to the local community.