MINNEAPOLIS — Target Corp. is slated to enter the Canadian market with a deal to buy sites of discount store chain Zellers Inc. from Hudson’s Bay Co.
The Minneapolis-based discounter said Thursday that it has agreed to pay nearly $1.83 billion Canadian ($1.85 billion U.S.) to purchase the leasehold interests in up to 220 sites currently operated by Zellers Inc. According to Target, the deal will pave the way for the first Target stores to open in Canada beginning in 2013.
Under the agreement, Zellers will sublease the 220 sites from Target and continue to operate them under the Zellers banner for a period of time.
Zellers overall has 279 stores across Canada and most have pharmacies except in Quebec, where only a handful of locations include a pharmacy department.
Target expects to open 100 to 150 Target stores throughout Canada in 2013 and 2014. The retailer noted that these initial stores will provide a strong foundation for a "more robust Target presence" in Canada down the road.
"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," Target chairman and chief executive officer Gregg Steinhafel said in a statement. "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 has named chief marketing officer Michael Francis as the executive committee sponsor of the retailer’s entrance into the Canadian market. In the role, Francis will oversee the extension of Target’s brand as part of the corporation’s first-ever expansion of its stores beyond the United States, according to the company.
Hudson’s Bay Co. said that in the wake of the sale to Target, Zellers Inc. will continue to operate a portfolio of Zellers stores in certain communities across Canada. The Canadian retailer added that that it expects some Zellers locations to be assigned to other retail enterprises. Besides Zellers, Hudson’s Bay Co. operates the Bay department stores, Home Outfitters specialty stores and value-priced Fields stores.
