Target Ceases Canadian Operations
The Target Corporation last week announced that it will discontinue operating stores in Canada through its indirect wholly owned subsidiary, Target Canada Co. As a part of that process, Target Canada filed an application for protection under the Companies’ Creditors Arrangement Act (CCAA) with the Ontario Superior Court of Justice (the Commercial List) in Toronto.
“When I joined Target, I promised our team and shareholders that I would take a hard look at our business and operations in an effort to improve our performance and transform our company,” said Brian Cornell, Target Corporation chairman and CEO, in a statement. “After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021. Personally, this was a very difficult decision, but it was the right decision for our company. With the full support of Target Corporation’s board of directors, we have determined that it is in the best interest of our business and our shareholders to exit the Canadian market and focus on driving growth and building further momentum in our U.S. business.”
Target Canada currently has 133 stores across the country and employs approximately 17,600 people. Target Corporation is seeking the Court’s approval to voluntarily make cash contributions of approximately $59 million into an Employee Trust. Upon approval by the Court, the proposed trust would provide that nearly all Target Canada-based employees receive a minimum of 16 weeks of compensation, including wages and benefits coverage for employees who are not required for the full wind-down period. Target Canada stores will remain open during the liquidation process.
Subject to Court approval, Target Corporation has committed to provide a $175 million debtor-in-possession credit facility to finance Target Canada’s operations during the CCAA proceedings. Target Canada also plans to sell its real estate assets, according to a statement issued by Target.
Target Corporation says its cash costs to discontinue Canadian operations are expected to be $500 million to $600 million, most of which will occur in the company’s 2015 fiscal year or later. The company says it has the resources to fund these expected costs, including cash on hand and ongoing cash generation by its U.S. business. Target Corporation expects this decision will increase its earnings in fiscal 2015 and beyond, and increase its cash flow in fiscal 2016 and beyond.
Registration Now Open for PlayCon
The Toy Industry Association (TIA) has announced that registration is open for PlayCon, TIA’s International Conference of Play Professionals. This year’s event will take place from April 29–May 1, 2015, at the Hyatt Regency Resort & Spa at Gainey Ranch in Scottsdale, Ariz.
Gary Grant, founder of The Entertainer, the largest independent toy retailer in the United Kingdom, will present PlayCon’s keynote address. Established in 1981, The Entertainer now operates 104 stores across the UK. Grant was recently named a recipient of the British Toy and Hobby Association’s Lifetime Achievement Award, issued in exceptional circumstances to individuals who have made a truly outstanding and significant contribution to the toy industry.
PlayCon 2015 will include general assembly presentations and interactive workshops. Discussion topics will include: Millennials, the concept of fandom, “ones to watch,” the “maker movement,” and more. Networking lunches, evening events, and social activities will round-out the three-day conference.
The full conference agenda, including this year’s presenters, will be circulated in the coming weeks. Registration is now open and may be completed online; 2014 prices will be honored through the end of February 2015, says the TIA.
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