Target Canada forced to halt fixtures sales during liquidation

Target Canada has been forced to stop the sale of all store fixtures during its ongoing liquidation because of a dispute with the retailer's landlords.

News on Canadian liquidation comes as U.S. parent axes 1,700 jobs and cancels 1,400 open positions

Target Canada has been forced to stop selling fixtures at its stores. Sales won't resume until the retailer resolves a dispute with some landlords. (Damian Dovarganes/Associated Press)

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."

A source involved in the case told CBC News that the landlords exercised an option under an existing court order to halt the sales. He says the dispute is over what fixtures can and cannot be removed from each individual store. 

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.
Target Canada's fixtures sale had included everything from shelves to filing cabinets to the staff microwave.

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: "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.

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.

Disputes between the retailer and some of its landlords have been ongoing. Some of Target Canada’s property owners had previously 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.

About the Author

Sophia Harris

Business reporter

Sophia Harris has worked as a CBC video journalist across the country, covering everything from the start of the annual lobster fishery in Yarmouth, N.S., to farming in Saskatchewan. She now has found a good home at the business unit in Toronto where she produces for national TV news and writes and shoots and edits video for Twitter:

With files from Canadian Press


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