Target considered Canadian windup as early as September 2014
Suppliers say Target allowed millions in bills to mount in those 5 months
Nearly five months before Target Corp. decided to leave Canada, the retailer's executive team had already considered winding up operations as one of a list of options for its failing Canadian business.
New documents filed by Target Canada on Monday offered a closer glimpse at how the company says the final months played out before its board of directors chose to file for court protection from creditors in January.
- Target's package for ex-CEO matches package for all 17,600 Canadian workers
- Target's launch into Canada 'a multifaceted failure'
The details of Target's exit from Canada were disclosed in response to more than 60 questions filed by suppliers in an effort to get more clarity around the weeks that led up to the company's filing.
The group is trying to determine how Target Canada went about ordering inventory around the time it made the decision to shutter its operations.
Suppliers are owed millions for goods and services supplied to Target in those five months. Of particular interest are the 30 days before Target Canada officially declared it would close, when the retailer was still ordering goods.
Starting last September, leaders at the company began to weigh a limited number of options for its Canadian business, some which involved minor changes while others took a more sweeping approach to its flagging results.
Considered closing just a few stores
The list included: the possibility of closing a small number of underperforming stores and one distribution centre; closing about half of Target Canada's stores and two distribution centres; or moving ahead with a "micro-strategy" that kept a small number of stores operating in urban markets.
Other alternatives considered were operating the stores as they were or making a swift exit from Canada.
"At such time, no decisions had been made with respect to a preferred course of action and, in fact, the primary focus continued to be on identifying ways to improve operations and to chart a path to profitability," the documents said.
A final decision wasn't made until the U.S. company's board of directors met on Jan. 14, the day before the announcement was made public, the company said.
Denies delaying news of bankruptcy
"The prospect of an orderly wind down of (Target Canada's) operations under the protection of the CCAA, or under the Bankruptcy and Insolvency Act for that matter, was not explored or considered in any meaningful way ... until late October 2014 and even then, only as one of several available alternatives," the retailer said in court documents.
Target Corp. announced in January that it would close all 133 Canadian stores, most which opened in 2013 in phases beginning in Ontario, saying it would take years to turn a profit.
The retailer has been in court to iron out the details of its departure, with a variety of creditors that include landlords, suppliers and others impacted by the closures.
Liquidation companies have been overseeing the sale of Target's inventory for about a month.
However, Target declined to some questions about the process, and declined to supply minutes from the company's board meetings between September 2014 and January 2015. The company said the requests for written communication was "overbroad" and "disproportionate" to the proceedings.