MINNEAPOLIS — Target Corp. here said Thursday it expects to open its first Canadian stores in 2013 following the signing of an agreement to purchase leasehold interests in up to 220 sites from Zellers Inc., a subsidiary of the Hudson's Bay Co., Toronto, at a cost of approximately $1.9 billion (U.S.).
Target said it expects to open 100 to 150 stores across Canada in 2013 and 2014. It anticipates renovating some of the Zellers locations, at an aggregate cost of more than $1 billion, the company said.
According to Gregg Steinhafel, chairman, president and chief executive officer of Target, "This transaction provides an outstanding opportunity for us to extend our Target brand beyond the U.S. for the first time in our company's history."
Target said the $1.9 billion will be allocated in two equal payments, scheduled for May and September, after which Zellers will sub-lease the sites from Target and continue to operate under the Zellers banner for a period of time.
Target also said last week it intends to pursue the sale of its credit card receivables portfolio, which totalled $6.7 billion (U.S.) at the end of October. It said it hopes to execute a transaction in which it would retain operating control of financial services.