Target Corp, the second-largest US retail chain after Wal-Mart Stores, yesterday said that it plans to enter Canada by paying C$1.825 billion ($1.84 billion) for taking over leases of 220 stores in Canada from Zeller Inc, a subsidiary of Hudson's Bay Co.
Target will pay C$1.825 billion, in two equal payments of C$912.5 million to buy the leasehold interests in up to 220 sites currently operated by Zellers, which will allow the Minneapolis-based retailer to open its first Target stores in Canada by 2013.
Target will invest more $1-billion in renovation and open 100 to 150 stores in 2013 and 2014 and sell the rest of the stores to other chains, including its rival Wal-Mart, which also entered Canada in 1994 by buying 122 Woolco stores from Woolworth Canada.
Zellers will sub-lease these sites from Target and continue to operate them under the Zellers banner for some time.
''This transaction provides an outstanding opportunity for us to extend our Target brand, Target stores and superior shopping experience beyond the US for the first time in our company's history,'' said Gregg Steinhafel, chairman, president and chief executive officer of Target.
Founded in 1931, Toronto-based Zeller's is Canada's second-largest retailer having more than 270 stores. It was acquired by Hudson's Bay in 1978 in a reverse takeover.