Current Event

Anthony Dinh

Period 1

Target Canada is going out of business

Ben Rooney

CNN Money

January 15, 2015

According to Target, they are going to begin closing down Target operations in Canada. This process will close about 133 stores that employ about 17,600 people. Target CEO, Brian Cornell, says that it was a difficult decision for him, but the right one for the company. Target is the second largest US retail change that has been struggling for years in Canada and will take a $5.4 billion pretax loss against the earnings in the fourth quarter due to the shutdown in Canada. Target also says that closing the Canadian stores will increase their earnings in the first year, and boost the cash flow in the years ahead. The court order authorizes $175 million in bankruptcy financing and $59 million in funding for employees severance.

I feel like the shutdown of Target in Canada is good for the company in the long run, but obviously bad for the employees. There are 17,600 employees who work for Target in Canada and they are slowly going to lose their jobs during the liquidation process. This will leave many families and people looking for a new job which will be a stressful process. For Target and their cooperation, they seem to have the easy part in this shutdown as they have more than enough money to pay the fines for this long process. This will also allow them to focus more on their operations in the US and not having to deal with expanding to other places and having to manage it.