Target Canada Co. was the Canadian subsidiary of the Target Corporation, the eighth-largest retailer in the United States. Formerly headquartered in Mississauga, Ontario, the subsidiary was formed with the acquisition of Zellers store leases from the Hudson's Bay Company (HBC) in January 2011. Target Canada opened its first store in March 2013, and was operating 133 locations by January 2015. Its main competition included Walmart Canada, Loblaws, Shoppers Drug Mart, and Canadian Tire.
Target Canada was ultimately unsuccessful, with an overly-aggressive expansion initiative, in addition to higher prices and a limited selection of products compared to Target stores in the United States and its Canadian rivals, particularly Walmart. The retail chain racked up losses of $2.1 billion in its lifespan, and was widely viewed as a failure, termed a "spectacular failure" by Amanda Lang of CBC News, "an unmitigated disaster" by Maclean's magazine and "a gold standard case study in what retailers should not do when they enter a new market" by the Financial Post. Target Canada commenced Court-supervised restructuring proceedings in January 2015, and finally shut down all of their stores by April 12, 2015, amid the retail apocalypse.
History
Trademark issues before 2010
In the absence of the Target Corporation chain in Canada, a number of retail companies, without any affiliation to the American company, made use of the "Target" name for various purposes. A regional variety store chain in Newfoundland and Labrador operated under the Target banner during the 1980s and early 1990s. There has also been a liquor store named Target Liquor in Edmonton, and a Target convenience store chain based in Toronto.
Before it entered Canada, Target Corporation attempted to solidify its rights to the "Target" brand name in Canada by buying the Canadian trademark rights of some of these existing users, in addition to filing new applications of its own.
Target Apparel trademark agreement
Target's expansion into Canada was threatened by one other party that claimed the Canadian rights to "Target" with respect to clothing. The Canadian trademark "Target Apparel" was registered in 1981 by Dylex Ltd., a Canadian retailer defunct since the early 2010s, covering "men's clothing, namely suits, pants, jackets, and coats". The rights to the mark were acquired in 2001 by Fairweather Ltd., part of the INC Group of Companies owned by Isaac Benitah. Target Apparel originally served as a private-label clothing brand, and not as the name of a retail store, and Fairweather would not apply to extend its trademark to cover retail services until April 2011.
INC Group opened a small Target Apparel retail store adjacent to the company's head office in December 2003. In late 2010, soon after Target's announcement that it planned to expand into Canada (but before the Zellers announcement), INC began expanding the banner to other higher-profile locations, including conversions of some of its existing Labels stores. Target challenged INC's rights to the Target Apparel trade name on numerous occasions; INC had succeeded in retaining those rights, but faced a further court challenge with a trial set to start in 2012.
On February 1, 2012, it was announced that Fairweather Ltd. and Target reached an agreement concerning the use of the Target name in Canada. Under this agreement, Fairweather would cease use of the Target Apparel name by 2013, giving Target Canada complete ownership of the Target brand in Canada.
2010: Consideration of Canadian operations
Regular rumours surfaced since at least 2004 that Target was interested in expanding into Canada by acquiring Zellers outright. In January 2010, Target publicly indicated long-term plans to expand internationally, likely including Canada, but that those plans would not take effect until 2013 at the earliest.
2011–2013: Leaseholds acquisition and partnership
On January 13, 2011, Target announced that it would purchase the lease agreements of up to 220 Zellers stores for C$1.825 billion. Under the agreement, Zellers would sublease the properties, and continue to operate them as Zellers locations until at the earliest January 2012 and at latest the end of March 2013.
Target did not buy the Zellers chain, which was left with 64 stores in less desirable locations. HBC failed to find a buyer for the remaining stores and planned to continue operating Zellers as a smaller chain. However, the geographical constraints of serving these far-flung Zellers outlets meant that operating them was no longer economically viable, so HBC announced on July 26, 2012, that it would close almost all of these stores.