Self Target

So Target is leaving Canada after two years and over five billion in losses. Unclear whether the losses include all the capital costs thrown away. Leaving recently-opened or near-opened stores. Multifloor anchor store in Bayshore Mall that didn’t get opened before Christmas, and now won’t open at all. Over 17,000 jobs lost.

Target somehow thinking it was so astute to take over selected leases of the Zellers subsidiary of The Bay. The Zellers being an independent operation acquired by The Bay, resulting in The Bay competing against itself.

All this expansion through acquisition or elimination. 21,000 Zellers jobs eliminated. Most, if not all, not hired by Target. Was told Target didn’t want people with Zellers background.

Guess they had some idea of “Target culture“. Similar to Blockbuster failure, some idea that a particular corporate vision is perfect, and not appreciating how they were perceived by others. The essential weakness of self-absorbed pride, corporate or otherwise. Target may not have even known whether its Target trademark was offensive to some, being associated with gun culture.

Consider how Wal-Mart expanded into Canada. No acquisition of existing Canadian corporation. Stores opening gradually, with particular emphasis on unserved locations. Creating jobs, rather than eliminations, at least at first instance. Rarely destroyed existing social welfare, though with at least one exception, and not of their direct doing.

Target seemed to not appreciate any goodwill associated with Zellers. That expansion into Canada through acquisition could have taken the form of taking over Zellers stores, initially rebranded as “Zellers: A Target Company”. No need to start a supply network from scratch. Gradually introducing Canadians to Target brand and, if encountering consumer resistance, continuing with Zellers brand. And the Zellers employees, many of whom had spend decades with the company, and who had developed strong customer relations.

Knew something was off when Target took over the Zellers lease at Billings Bridge. Instead of reopening quickly, spent months with an empty store, while they reconfigured things. Had they acquired Zellers directly, there would have been no closed doors. Turns out this was intended by Target–get the Zellers lease and then keep the store vacant for six to nine months, while doing “extensive renovations”.

Hopefully some major case studies as to the blindness of corporate pride.

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About brucelarochelle

http://www.lmslawyers.com/bruce-la-rochelle
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