01/19/2015 06:00 EST | Updated 03/21/2015 05:59 EDT

Target leaves empty space in Montreal economy

Not everyone saw it coming.

Despite Target Canada losing more than a billion dollars, firing executives and admitting it opened too many stores too quickly, many Montrealers had faith the company would turn the situation around. They banked on it and are now counting their losses.

A pharmacist at a Montreal-area Target store, who spoke on the condition of anonymity, says for him the situation is "catastrophic."

He, along with his wife and two young children, just moved into their first new home. Now he's worried about making mortgage payments.

It's his first time running a franchise and he's concerned about the employees he hired — who will not benefit from Target severance packages.

"All of us depend on this pharmacy, me and two pharmacists and another technician, so ... can you imagine four families will be in the street?"

His pharmacy operates under the Brunet banner, which is owned by a subsidiary of Metro Inc. 

The pharmacist says Brunet has promised to help him find a new location but he worries the rent will be much higher than the deal with Target.

- Hear Shari Okeke's full story on CBC's Daybreak at 7:15 a.m.

Filling Target spaces

Meanwhile, Target's landlords need to figure out how to fill the space that will soon be vacant.

"The unemployment rate in Montreal is pretty much flat, it's not declining as we hoped. So without ... (enough) jobs being created ... it's almost impossible to expect these commercial spaces to be filled quickly," said Sébastien Lavoie, assistant chief economist at Laurentian Bank Securities.

Lavoie says all the empty commercial space will hurt the local construction industry.

"We have to fill these units first ... before building new commercial space and that's why, in terms of impact for the construction industry, it's extremely negative in my view in the medium term, given the size of the commercial space left by Target," Lavoie said. 

Lavoie says it's tough for traditional retailers because so many people shop online now and Quebecers are more financially stretched than shoppers in other parts of Canada.

"It will take a lot of time before we see more traffic or activity again in shopping malls such as Alexis Nihon. It's not a question of three months or six months ... I think we're talking about a year, maybe two," he said.

But some tenants at shopping centres that are losing Target stores are optimistic, saying Target did not attract much business anyway.

The owner of a hair salon at Centre Terrarium in Pointe-Claire is convinced another retailer will quickly move into Target's space.

"In a certain way it's going to be better for the plaza since unfortunately (Target) didn't do what it was supposed to do for the plaza. So now we have only to look forward to have a better store there," said Coiffure Jo-Ann owner, Joseph Morello.