Much of the retail discussion here in Canada the past week or so, has been Target's official announcement of its future Canadian launch. Mind you, according to the news release, they won't be here until 2013, giving Walmart 2 years to improve and fine tune their preparations. I'm betting Supercentres are going to continue to be developed at an even faster pace.
The financials are also a bit mind boggling. Target is paying $ 1.825 billion (Cdn) for (up to) 220 Zellers' leases ... not actual real estate, just leases. That's averagely $8.3 million per location, to be able to lease the space. Somewhat offsetting that number presumably would be Zellers subleasing back the space until the conversion begins. Target also says it will spend over $1 billion remodeling and renovating 100-150 stores in 2013-2014 to make them Targets. Let's call it 125 stores. That's $8 million per store to renovate.
That's somewhere around $16 million/store to get into business here. A big investment, and giving Walmart (and Canadian Tire) a 2 year heads up.
Here is Target's press release:
http://investors.target.com/phoenix.zhtml?c=65828&p=irol-newsArticle&ID=1515822&highlight=
and here's Target's CEO (Gregg Steinhafel) explaining it to Canadian Press.
http://www.theglobeandmail.com/report-on-business/video/target-boss-outlines-canadian-vision/article1869859/?from=1868308
Makes me wonder ...
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