Zellers department stores in the Okanagan will be impacted by the sale of the Canada retail chain outlet to the U.S.-based Target Corporation.
However, whether the stores will take on the Target name brand or remain Zellers outlets has yet to be clarified.
Under the terms of the deal announced last week, the Hudson Bay Company, owner of the Zellers chain, reached an agreement with Target Corporation worth $1.825 billion for the sale of up to 220 leasehold interests that are currently operated as Zellers stores.
As part of the transaction, Zellers Inc. will sublease the properties back from Target Corporation upon closing and continue to operate them as Zellers stores for a period of time.
Target expects to open 100 to 150 Target stores throughout Canada in 2013 and 2014.
Additionally, it is anticipated that a select number of Zellers locations will be assigned to other retail enterprises.
Zellers Inc. will continue to operate a portfolio of certain Zellers stores in specific communities across the country.
According to Richard Baker, governor or the Hudson’s Bay Company, “This transaction provides attractive long-term value and will allow us to invest substantial capital into our department store and specialty store businesses to continue to drive growth.”
Baker said the sale of these leasehold interests is estimated to create over 20,000 net new jobs in Canada and has the potential to generate over $1.5 billion in Canadian economic activity through the renovation of the Zellers locations.
“This transaction provides an outstanding opportunity for us to extend our Target brand, Target stores and superior shopping experience beyond the United States for the first time in our company’s history,” said Gregg Steinhafel, chairman, president and chief executive officer of Target Corporation.
“We are very excited to bring our broad assortment of unique, high-quality merchandise at exceptional values and our convenient shopping environment to Canadian guests coast-to-coast.”