BUSINESS

Court approves Target to begin liquidating inventory as early as Thursday

02/04/2015 12:44 EST | Updated 04/06/2015 05:59 EDT
TORONTO - Shoppers can expect their local Target Canada store to begin knocking down prices starting Thursday, after the retailer received court approval to liquidate its stock.

The company got the go-ahead at a hearing Wednesday involving dozens of lawyers representing the retailer, landlords and suppliers.

Target spokeswoman Molly Snyder said discounts will take up to 30 per cent off regular prices.

Already many Target stores have stopped carrying perishables like milk, eggs and frozen foods, Snyder said in an interview.

The company is still clearing product out of its distribution centres, she added. In addition to its remaining inventory, Target's shelving, fixtures and equipment will also be sold.

The U.S.-based retailer announced last month that it would close all 133 of its Canadian stores and lay off more than 17,000 staff.

Some of those employee reductions have already happened at its Toronto headquarters, where its 770 person staff has been reduced to about 80 people, Snyder said.

Target opened its doors in Canada less than two years ago, after it purchased old Zellers locations and remodelled them to more closely reflect the U.S. company's image.

But the retailer failed to deliver on customer expectations — sales never got off the ground and it continued to bleed money from its Canadian operations with no sign of a solid improvement.

When Target announced its decision last month to exit the country, the company emphasized plans to make it happen quickly, promising that a liquidation would start within a few weeks.

Part of the exit strategy includes selling off the valuable properties and existing leases for its stores, which are estimated to be worth about $1.1 billion.

On Wednesday, the retailer and its liquidator were told they could begin to hunt for others interested in buying up those assets.

Major brands like Canadian Tire, Loblaws and GoodLife Fitness are expected to put an offer in on at least some of the locations.

Lawyers representing some landlords agreed to meet with the court next Wednesday to work out further details on how the real estate sales will proceed.

The retailer and its liquidator have argued that it needs to sell the properties immediately to keep its speedy exit from the Canadian market on schedule for mid-May. But landlords are concerned that Target's liquidation sales will take away business from other tenants.

"I think all parties are exaggerating," Ontario Superior Court Justice Geoffrey Morawetz said.

"And I mean that quite sincerely."

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