The fate of many Zellers stores — including the Courtenay store in the Driftwood Mall — is uncertain as major U.S. retailer Target is scheduled to move into locations across Canada.
In an announcement Thursday, Hudson’s Bay Company — which owns the Zellers Inc. subsidiary — said it’s reached an agreement with Minneapolis-based Target Corporations for $1.825 billion for the sale of up to 220 leaseholds currently operated as Zellers stores.
As part of the transaction, Zellers Inc. will sublease the properties back from Target upon closing and continue to operate them as Zellers stores for a period of time.
“All of the stores will continue to operate as Zellers for the next 12 months. During that time Target will determine how many stores they will take over,” said Freda Colbourne, media spokesperson for Hudson’s Bay Company in a phone interview. “They have 220 stores to chose from. They may take them all; they may take less.”
According to a press release, Target expects to open 100 to 150 stores throughout Canada in 2013 and 2014.
“We believe our investment in these leases will strengthen the surrounding communities as well as create strategic and financial value for Target stakeholders,” said Gregg Steinhafel, chairman, president and chief executive officer of Target Corporations.
Founded in 1670, Hudson’s Bay Company is a conglomerate that operates the Bay, Zellers, Home Outfitters and Fields stores. In 2006, Zellers was privatized as part of a takeover bid for the Hudson’s Bay Company by American businessman Jerry Zucker.
Competing against other discount retail giants, Target operates in nearly all of the United States offering “trend-forward” merchandise at low cost, as opposed to the traditional concept of focusing on low-priced goods.
Colbourne added it is anticipated that a select number of Zellers locations will be assigned to other retail enterprises.
Zellers will continue to operate a portfolio of certain Zellers stores in specific communities across the county, although Colbourne could not identify those locations.
She noted Target will make its decisions on which stores it will take over, “some time in the next year.”