03/10/2015 02:13 EDT | Updated 05/10/2015 05:59 EDT

Target Canada forced to halt fixtures sales during liquidation

There’s another hiccup in Target Canada’s bumpy journey to the finish line.

The company has been forced to halt sales of all of its store fixtures.

"Due to issues raised by some of Target's landlords, we must temporarily cease selling FF&E [furniture, fixtures and equipment] until further notice," a March 9 company email informed various Target staff.

The memo, obtained by CBC News, explains to staff, "Until these issues are resolved, all FF&E sales are on hold. No fixtures can be taken down or removed (whether they are purchased or not) from the store until further notice."

As part of its all-items-must-go liquidation sale, locations had also been selling everything from store shelving to filing cabinets to the microwave and fridge in the staff room.

Tracking down the shutdown

CBC News called various Target Canada locations across the country. Every store told us fixture sales are on hold for now.

A fixtures manager at an Ontario location informed us, "The landlords have a court order that stops fixtures sales. We're waiting for word on when that will be resolved."

"It's a legal issue, it's the landlords versus Target and they've stopped fixtures sales so we can't sell them. No one Canada-wide is selling fixtures."

When asked when the issue will be resolved, the manager replied, "We're expecting word on Thursday but these things can take time. We're not entirely sure."

"We don’t have any details to share," was Target’s only response on the matter.

CBC News also contacted some of the lawyers involved in Target Canada’s court supervised wind-down and its previous dispute with store landlords for comment. No one has responded yet.

Tenant disputes

In January, U.S.-based Target announced it was closing its Canadian operation, laying off more than 17,000 employees. It’s now liquidating its 133 stores in this country.

Some of Target Canada’s property owners had raised concerns that the wind-down could hurt business if stores remained vacant for a long time. Another worry was that fellow tenants could lose business during a liquidation sale offering deep discounts.

But Target Canada and its landlords reached an agreement last month on a process that gives the retailer until the end of June to sell its store leases.

If a lease isn’t sold by the June deadline, then the rights will be returned to the landlord, according to court documents.

Although fixtures are now off the sales block, Target Canada stores will continue with its liquidation sale of merchandise.

It is now selling goods at 30 to 50 per cent off, a far bigger discount from the beginning of the big sales event when some items were discounted by only 10 per cent.

On Target Canada’s website, it still advertises that store fixtures and equipment are for sale.

Global layoffs

The fixtures dispute isn’t Target’s only bump in the road.

U.S. Target also announced today that it is laying off 1,700 workers and eliminating another 1,400 unfilled positions as part of a restructuring aimed at saving $2 billion over the next two years. Most of the job losses will be at its headquarters and locations in Minneapolis but some cuts will affect Target workers in India. 

Target lost $2.6 billion US, or $4.14 per share, in the three months ending Jan. 31, dragged down by huge costs associated with shutting down its failed Canadian expansion.