Toronto-based retail chain Fairweather Ltd. has filed a $250-million lawsuit against Target Corporation in federal court, days after the U.S. discount giant announced plans to expand north of the border.
According to documents filed Monday, Fairweather is also requesting an injunction to keep the American firm from using the name Target in Canada, claiming that its expansion north would cause Fairweather to lose customers, devalue the "Target Apparel" name and lose control of its reputation and trademark.
It's also seeking to have the U.S. retailer surrender ownership of targetapparel.com, which sends users to Target's American website.
Fairweather has owned the Canadian rights to that name for a decade in Canada, court documents state, and has operated a clothing store with the name "Target Apparel" in Toronto since 2005. It also recently opened retail stores under the name "Target Apparel" in Sudbury, Ont. and Nanaimo, B.C.
The American Target chain announced Thursday that it is paying the Hudson's Bay Company $1.83 billion to acquire up to 220 Zellers stores from the 279 that are currently open across Canada.
Speculation has been rife the company was considering a move north of the border for some time, but the U.S. company only confirmed its international expansion plans in June of last year.
It had been stymied by the hunt for suitable locations, and most recently, the economic slowdown. Now it will have to contend with a multimillion-dollar copyright dispute.
Target filed a challenge with Canada's trademark office in July in which it claimed that Fairweather's owner, International Clothiers, hasn't been using the Target name.
The Canadian retailer has until the end of February to prove that it has used the name over the past three years, or that it intends to use it, to retain ownership.
Fairweather has not commented on the legal action.
Target spokesperson Jessica Carlson said she could not comment on the pending legal proceedings, but said her company plans to use the same name and logo.
"There really is nothing that prevents Target from using the Target name and branding elements in Canada the same way we do in the United States," she told The Canadian Press.
In 2005, Fairweather lost ownership of the Target trademark temporarily. The American retailer sought to have it cancelled, which Industry Canada did. But it was restored later, following a ruling by The Federal Court of Appeal.
Target said last week that its Canadian expansion deal won't mean an immediate end to the Zellers brand, but is rather the first step in opening between 100 and 150 of its own stores here by 2014.
The Minneapolis-based company expects to spend approximately $1 billion to remodel and reopen the existing Zellers stores under its own brand. The company also says it will have hired up to 20,000 people once its stores are operational.
Target's more than 1,700 stores across the U.S. have long been a favourite of shoppers on the hunt for what the retailer has dubbed "discount-chic." But it remains to be seen how Target will stack up in Canada.
With files from The Canadian Press
