Target Canada liquidation: what to expect from clearance sales

When Target’s doors open Thursday morning at 8 a.m., there will be sales, that’s for certain. But will the sales be good? That’s not as clear.

Target officials say discounts will be up to 30%

Target's liquidation sales starts Thursday with discounts of up to 30%. (Colin Perkel/Canadian Press)

When Target’s doors open Thursday morning at 8 a.m., there will be sales, that’s for certain. Whether or not the sales will be good is not clear.

On Wednesday afternoon at the Market Mall location in Calgary, there were more staff than customers in the store. They were busy stocking shelves, changing out sale signs for clearance ones and setting up towers of toilet paper packages.

Meanwhile, the iPad cases were empty.

The art of liquidation

Liquidation is something of an art, according to Jim Danahy, a retail analyst with CustomerLAB. The sale process is not being managed by Target, but by three professional liquidators, who will entirely control the pricing strategy as Target sells off its stock and furnishings.

You’ll see some disappointing discounts on the items you probably want.- Jim Danahy, CustomerLAB

Target officials say the discounts will be in the 30 per cent range, at least to start. Typically, in liquidation sales, there is a steadily increasing discount level.

The liquidator also has the job of managing Target’s landlords and suppliers, who would like to protect other tenants. That is why the advertising around the sales must be somewhat muted — without flashy "going out of business" banners.

Landlords afraid of predatory sales

"The vendors and the mall owners are trying to ensure that it doesn’t become predatory," said Danahy. "You can’t wipe out all of our other retailers [with the sale]. They can’t be made to suffer because of Target’s problem."

Target has said the sale will last until May 15th at the latest, although some stores may sell out their stock earlier and close.

There will be a substantial amount of stock to go through in the coming weeks. Danahy says the lead time on items that were purchased from Asia can be 90 or 120 days and Target’s buyers were busy making orders in the lead up to the retailer’s Jan. 15th announcement it was leaving Canada. Some of those orders may have been cancelled, but others are en route to Canada.

As for whether the stores will be a circus in the coming weeks, Danahy doubts it. 

"I think we are going to see an orderly, very sophisticated process," he said.


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