Zellers to close majority of remaining stores by March 2013
Published Thursday, July 26, 2012 2:40PM EDT
Last Updated Thursday, July 26, 2012 9:22PM EDT
The majority of Zellers stores will be closing their doors by March 2013, according to a company spokesperson.
Tiffany Bourré told CTVNews.ca in an email that the Hudson’s Bay Company (HBC), owner of Zellers, decided that keeping the mass merchandise discounts stores open was not financially viable.
“After a lengthy review and numerous discussions with various parties, it became apparent that continuing to operate the Zellers banner in its current form was not viable, particularly given the geographic footprint of the remaining locations,” said Bourré.
In early 2011, U.S. retail giant Target acquired the leaseholds for 189 Zellers locations throughout Canada for $1.825 billion.
The majority of the locations will be converted into Targets, with the first 125 Canadian locations set to open in 2013.
The deal left HBC with 64 Zellers locations across Canada, the majority of which will close.
Target Corp. did not immediately comment.
Target has encouraged workers from Zellers to apply for jobs at its stores. However, a Zellers employees' union claims Target has not committed to employ Zellers workers.
An average Zellers store employs about 100 people.
Bourré said Zellers is considering options for certain locations and could potentially rebrand some stores, but she wouldn’t say which locations are being considered.
“This will be determined at a later date,” she said.
A spokesperson for Walmart Canada declined to comment to The Canadian Press on whether the retailer is interested in acquiring any of the locations.
The sale of Zellers stores to Target has been on the table since at least 2004.
HBC has said that with the proceeds from the sale it will pay off debt and "spend aggressively" on its other brands, such as The Bay and Home Outfitters, as well as Lord & Taylor's in the U.S.
HBC also said an initial public offering of the revamped company is "a very possible scenario."
With files from The Canadian Press.