Target venturing north of the border to Canada?

Seems Target is looking to open discount stores in Canada, marking the first International expansion for the Minneapolis-based retailer. What's this, you say? Target doesn't have stores in Canada yet? Shockingly no, but all that may be about to change.

Rumors abound that Target is scouting locations to the North. But it's all still speculation. Target Spokeswoman Amy Reilly tells Walletpop that Target is continuously monitoring the retail landscape for prospective locations and currently exploring beyond the lower 48 states, including adding more stores in Hawaii and Alaska as well as potential International locations. Beyond that anything is pure speculation. "The rumor tends to circulate routinely," she says. And for many, it's difficult to believe the Target hasn't expanded beyond the United States.

Unbelievably, in the 48 years Target has been in operation, it's never ventured beyond our borders. Perhaps even more unbelievable, is the fact that both Kmart and Wal-Mart opened their first stores the very same year: 1962. During that time, Kmart expanded rapidly, spawned new retail formats like Borders Books, and ultimately spiraled into Chapter 11 bankruptcy. Today, Kmart is part of Sears Holdings and continues to struggle to be relevant with shoppers.

Wal-Mart on the other hand, has become not just the dominant retailer in the United States, but in the world. It has more than 8,400 stores globally, 4,100 of which are in the U.S. Target's 1,740 stores in 49 states -- Vermont is still without -- seem paltry in comparison. Target's domestic focus for the foreseeable future is on remodeling stores and emphasizing food, as its once strong position as a retailer of home goods continues to decline. It's adding only 10 new U.S. stores this year and has backed off announcing a ramped-up store opening schedule for 2011, even as the economy shows signs of recovery.

Looking for growth beyond the U.S. makes sense for Target, and Canada is a logical next step with its similar customer base, a shared language and border, and the experience of the many retailers that have successfully gone before to draw from. But it's also out of character for this very cautious retailer and its slow domestic growth is a good example of this tentative tendency.

There are also some legal hurdles to attend to first, namely wresting its very name from another retail store. Les Ailes De La Mode Inc. operates stores under the Target name, with a very similar logo, in Canada already. In fact, the pending arrival of a Les Ailes Target store to the Rainbow Centre in Sudbury, Ontario may have helped fuel the speculation that the U.S. Target is crossing the border. Rest assured, it's not our Tar-Jay, says Joe Zito vice president of operations for Vista Hospitality Canada, which manages the mall in question.

"That rumor has been around forever. There is a store called Target going up and we've had a lot of confusion," he says. "The print and the logo looks very similar, but it's a trade name that's been registered in Ontario for 20-25 years, and the rights belong to that corporation. Similarly, there's a Target discount chain in Australia even more like the U.S. retailer than Les Ailes, which sells only apparel and fashion items under the Target banner.

This wouldn't be the first time talk of Target expanding to Canada has been bandied about. Whenever U.S. sales falter companies start preaching International expansion; in this Target is not alone. But Canada's Financial Postcites anonymous sources close to the company who say the Target is closer to securing sites than ever before.


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