Target to invest more than planned to enter Canada
MINNEAPOLIS — Target Corp. plans to spend more than it had forecast this year on its entry into the Canadian market as it nails down more of the best retail locations sooner than expected.
The retailer said it will be able to “clarify” within weeks the number and locations of the first 100 to 150 stores it will open in Canada.
“We expect to close on higher value lease transactions sooner than expected,” Target CFO Doug Scovanner told analysts on a conference call.
In January, Target announced it had bought the rights to 220 Zeller’s leaseholds in Canada for $1.82 billion.
Target said it now expects its Canadian start-up costs could run as high as $40 million to $50 million, or 16 cents to 20 cents per share this year, up from its previous forecast of 10 cents a share, Scovanner said.
“Both expected profits once we open in Canada and expected burden per share prior to opening is larger than we thought likely 90 days ago,” he said.
The company recorded $11 million in the quarter in direct start-up expenses as it began building a Canadian team to study the market and develop technology and supply chain solutions, according to The Toronto Star.