Three Winnipeg Zellers stores were left twisting in the wind Friday as Target Corp. took another big step toward its highly anticipated entry into the Canadian market in 2013.

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This article was published 23/9/2011 (3674 days ago), so information in it may no longer be current.

The Zellers store, which opened last December in the basement of the Bay downtown, won’t become a new Target location.

JOHN WOODS / WINNIPEG FREE PRESS

The Zellers store, which opened last December in the basement of the Bay downtown, won’t become a new Target location.

Three Winnipeg Zellers stores were left twisting in the wind Friday as Target Corp. took another big step toward its highly anticipated entry into the Canadian market in 2013.

The U.S. retail giant unveiled the last 84 Zellers locations it will be acquiring from Hudson's Bay Co. as part of a $1.825-billion deal that was announced last January.

That deal gave Target the option of acquiring the leasehold rights to up to 220 of HBC's 273 Zellers outlets in Canada. Target unveiled its first 105 selections last May, and they included four in Winnipeg and one in Brandon.

The other three Zellers outlets in the province -- all in Winnipeg -- were tossed back into the mix. But they weren't among Friday's selections, either, so they remain HBC properties.

An HBC spokesman said it will be the first quarter of next year, at the earliest, before company officials decide what to do with the remaining 84 outlets. In the meantime, they'll continue to operate as Zellers stores, Tiffany Bourre said, as will the 189 outlets Target is acquiring.

Although Target plans to close its newly acquired outlets and convert them into Target stores, that won't start happening until sometime next year, with a goal of reopening them in 2013.

One of the most intriguing questions is what will become of the Zellers outlet in the basement of the downtown Bay store. When it opened last December, it was hailed as another important piece in the ongoing efforts to revitalize the downtown.

But Bourre revealed Friday it was never one of the outlets available to Target because the space is owned by HBC, not leased from someone else. So there were no leasehold rights to sell.

She said HBC will likely announce its plans for that outlet at the same time as it announces the fate of the other 83 stores it still owns.

The 84 leases announced on Friday include the 39 leases for which Target transferred the rights to Walmart in June.

One prominent local retail developer/leasing specialist -- Shindico Realty Inc. president Sandy Shindleman -- said people shouldn't rule out the possibility HBC will keep the Zellers chain going for the long term.

He said there may have been reasons why the final three Winnipeg locations weren't chosen by Target, and it's wrong to assume it's because they're bad locations or poor performers. It could have been because the terms of their leases didn't meet Target's needs.

And even if HBC shutters the Zellers chain, Shindleman predicted other tenants will be found for the other two outlets that were passed over by Target in the Fort Richmond and Northgate shopping centres.

"It may be someone (in Canada) that neither of us has thought of," he said.

"And there are many American chains looking to come to Canada."

If the downtown Zellers store is doing well -- and Bourre confirmed it is -- Shindleman said HBC might just incorporate it into the Bay's operations.

"They could just take the Zellers name down and keep all of the same inventory and everything that's in it."

Bourre agreed that keeping the Zellers chain alive is one of the options HBC likely will be considering.

But Toronto-based retail analyst John Winter said that's probably not economically feasible. He predicted it will either sell the leasehold rights to the remaining outlets, or convert them to another HBC format -- a Home Outfitters store, for example.

"I think the name Zellers will disappear. I think it would be a challenge to run a company when somebody has already come along and picked up your best stores and left you with everything that either shouldn't have been operating in the first place, or are too small or are poor performers."

murray.mcneill@freepress.m.b.ca

What's out, what's in

HERE are the locations of the three Winnipeg Zellers outlets not selected by Target Corp.:

-- Basement of the Bay's downtown store, at Portage Avenue and Memorial Boulevard;

-- Fort Richmond Shopping Centre on Pembina Highway;

-- Northgate Shopping Centre on McPhillips Street.

 

HERE are the five Zellers locations Target selected last May:

-- Polo Park Shopping Centre on Portage Avenue;

-- Kildonan Place Shopping Centre on Regent Avenue;

-- Grant Park Shopping Centre on Grant Avenue;

-- Southdale Shopping Centre on Fermor Avenue;

-- Shoppers Mall in Brandon.