THE LAST DAYS OF TARGET

The untold tale of Target Canada$$s difficult birth, tough life and brutal death

By Joe Castaldo

Exterior of a closed Target Canada store Scrawled words reading $$I remember wanting to vomit.$$

The grand opening of Target Canada was set to begin in one month, and Tony Fisher needed to know whether the company was actually ready. In February $2013,$ about a dozen senior$-$level employees gathered at the company$$s Mississauga, Ont., headquarters to offer updates on the state of their departments. Fisher, Target Canada$$s president, was holding these meetings every day as the launch date crept closer. The news was rarely good. The company was having trouble moving products from its cavernous distribution centres and onto store shelves, which would leave Target outlets poorly stocked. The checkout system was glitchy and didn$$t process transactions properly. Worse, the technology governing inventory and sales was new to the organization; no one seemed to fully understand how it all worked. The $750$ employees at the Mississauga head office had worked furiously for a year to get up and running, and nerves were beginning to fray. Three test stores were slated to open at the beginning of March, followed shortly by another $21.$ A decision had to be made.

Fisher, $38$ years old at the time, was regarded as a wunderkind who had quickly risen through the ranks at Target$$s American command post in Minneapolis, from a lowly business analyst to leader of a team of $400$ people across multiple divisions. Launching the Target brand in a new country was his biggest task to date. The news he received from his group that February afternoon should have been worrying, but if he was unnerved, Fisher didn$$t let on$.$ He listened patiently as two people in the room strongly expressed reticence about opening stores on the existing timetable. Their concern was that with severe supply chain problems and stores facing the prospect of patchy or empty shelves, Target would blow its first date with Canadian consumers. Still, neither one outright advocated that the company push back its plans. $$Nobody wanted to be the one to say, $$This is a disaster,$$ says a former employee. But by highlighting the risks of opening now, the senior employees$$ hope was that Fisher would tell his boss back in Minneapolis, Target CEO Gregg Steinhafel, that they needed more time.

$$Nobody wanted to be the one to say, $$This is a disaster.$$

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The magnitude of what was at stake began weighing on some of those senior officials. $$I remember wanting to vomit,$$ recalls one participant. Nobody disagreed with the negative assessment$$everyone was well aware of Target$$s operational problems$$but there was still a strong sense of optimism among the leaders, many of whom were U$.$S$.$ expats. The mentality, according to one former employee, was, $$If there$$s any team in retail that can turn this thing around, it$$s us$.$ The group was riding a wave of momentum, in fact. They had overcome seemingly endless hurdles and worked gruelling hours to get to this point, and they knew there were costs to delaying. The former employee says the meeting ultimately concerned much more than when to open the first few stores; it was about the entirety of Target$$s Canadian launch. Postponement would mean pushing back even more store openings. Everyone else in attendance expressed confidence in sticking to the schedule, and by the time the meeting concluded, it was clear the doors would open as promised. $$That was the biggest mistake we could have made,$$ says the former employee.

Roughly two years from that date, Target Canada filed for creditor protection, marking the end of its first international foray and one of the most confounding sagas in Canadian corporate history. The debacle cost the parent company billions of dollars, sullied its reputation and put roughly $17,600$ people out of work. Target$$s arrival was highly anticipated by consumers and feared by rival retailers. The chain, whose roots stretch back to $1902,$ had perfected its retail strategy and grown into a US$$70-$billion titan in its home country. Target was a careful, analytical and efficient organization with a highly admired corporate culture. The corporation$$s entry into Canada was uncharacteristically bold$$not just for Target, but for any retailer. Under Steinhafel, the company paid $$1\mathrm{.}8$ billion for the leases to the entire Zellers chain in $2011$ and formulated a plan to open $124$ locations by the end of $2013.$ Not only that, but the chain expected to be profitable within its first year of operations.

Why Target Canada collapsed has been endlessly dissected by analysts, pundits and journalists. But the people who know what happened best are the employees who lived through the experience. On the first anniversary of the company$$s bankruptcy filing, Canadian Business spoke to close to $30$ former employees in Canada and the U$.$S$.$ to find out how Target, one of the best retailers in North America, got i