Target doesn’t want anything to do with ‘depressed’ Zellers

Target doesn’t want anything to do with ‘depressed’ Zellers
Published on Friday August 17, 2012  Francine Kopun Business Reporter
Target wants nothing to do with the old Zellers stores or image – it doesn’t even want its customer lists, according to documents filed with the B.C. Labour Relations Board.
The documents were filed in defence of a claim by the United Food and Commercial Workers Union, which is trying to have Target declared a successor employer at the Brentwood Mall location in Burnaby, set to open as a brand new 160,000 square foot marquis Target store in 2015.
If the claim is successful, it would put Target in the position of having to employ the current Zellers workers at the Brentwood location, who are unionized.
Hearings are scheduled for August 27-31.
Target’s defence against the UFCW application offers a glimpse behind the brand.
Target’s preference in expanding into Canada was to adopt a “Greenfield” approach – completely new constructions. But Target felt that the comparatively intensive regulation of land use in Canada could delay the process.
Purchasing the Zellers leases from HBC for $1.825-billion allowed the U.S. firm to take on leases that in many cases had terms which were well below market value and represented an opportunity for Target to save millions of dollars in rent.
Zellers had approached Target in the past about making a deal.
“Based on overtures from Zellers in the past, Target was aware that Zellers was prepared to consider a transaction that would provide Target with the right to acquire leasehold interests in a portion of Zellers’ sites,” according to the Target statement.
Target plans to completely remodel each former Zellers location, spending $10-$11-million per site.
Zellers and HBC share a client list through their joint customer loyalty program, HBC Rewards, but Target is not acquiring the list.
“When compared to Target’s guests in the U.S., Zellers attracts a different customer base, older and more likely to be ‘empty nesters.’ Zellers customers are also likely to spend significantly less per visit than a Target guest.”
HBC has retained the lists.
Target Canada spokesperson Lisa Gibson says Zellers customers should not infer from this that they are not welcome at Target.
 “We welcome any and all guests to shop our stores. We were simply saying in the documents filed that our typical guest demographic is quite different than Zellers typical guest demographic.”
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