Target wins approval to replace Zellers, told stores need Canadian content | News | Financial Post
Shoppers anxious to get inside a Target store when it opens its doors in Canada will find Canadian content inside, under a federal ruling announced Friday that paves the way for the American retailer to take over Zellers stores across the country.
The deal isn’t the first time the federal government has required a foreign company to sell Canadian cultural goods in exchange for entering the market.
However, it left one cultural industry group wondering why Target, a discount retailer, had to go through the federal review when other companies, such as Walmart, had not.
One business expert was shaking his head at what he called protectionism by another name.
A spokeswoman for Target wouldn’t say how the changes will affect what shoppers see.
“We will be sharing details around our merchandising strategy at a later date. We have had ongoing conversations with our suppliers, including domestic suppliers, for some time now,” Target Canada spokeswoman Lisa Gibson said in an email.
The first Target stores will open in Canada by April 2013, Gibson said.
The cabinet decision says Target must invest $3.5-billion in its Canadian stores, which includes hiring up to 25,000 people by 2015, or about 100 to 200 employees at each store. Target will also have to sell “uniquely Canadian cultural products.”
The approval comes more than three months after Heritage Minister James Moore recommended that the federal government review Target’s takeover plan.
“When you start to force Target to accept a level of Canadian content, you are affecting the nature of the store,” said Ken Wong, a business and marketing expert from Queen’s University in Kingston, Ont. “That’s inappropriate. It’s protectionist under any other name.”
The Minnesota-based retail giant, which has more than 1,700 stores across the United States, has been eyeing the Canadian market for more than a decade.
Target announced in January 2011 a $1.83-billion deal to acquire the leases on up to 220 Zellers stores from Hudson’s Bay Co. Target plans to open 125 to 135 stores in Canada and sell off leases for the stores it doesn’t need.
Many Zellers stores slated to become Target outlets are be closed for six to nine months for remodelling, with about $10-million to $11-million spent to upgrade each location.
Strange Random Canada Quote:
- Target can replace Zellers, but needs Canadian content, feds rule (theprovince.com)
- Target expansion gets Ottawa’s OK (lfpress.com)
- Target gets nod from Feds for full Zellers takeover – with conditions (vancouversun.com)
- Terence Corcoran: Target deal not about CanCon – it’s about easing rules on foreign ownership (opinion.financialpost.com)
- Target wins approval to come to Canada (cbc.ca)
- Canadian government gives OK to Target expansion (bizjournals.com)
- Ottawa approves Target entry into Canada (theglobeandmail.com)
Posted on July 8, 2012, in Article and tagged Andy Barrie, Canada, Canadian, Hudson's Bay Company, James Moore, Minister of Canadian Heritage, Target Canada, Target Corporation, United States, Walmart, Zellers. Bookmark the permalink. Leave a comment.