Target likely has Zellers in its sights, expert says

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This article was published 13/01/2011 (5574 days ago), so information in it may no longer be current.

MOUNTING speculation that Zellers will be sold to a U.S. retail chain makes a lot of sense, according to one local marketing specialist, and he thinks the likely buyer is Target stores.

“I think they’re going to do this deal,” Rob Warren a marketing instructor at the University of Manitoba, said in an interview Wednesday. “And I think from Target’s perspective, this is a good opportunity for them.”

Warren was commenting after a Globe and Mail story Wednesday quoted unnamed sources saying the U.S. owner of the Zellers and Bay retail chains is in talks with American retailers about selling them some of its properties, particularly some of its Zellers stores.

The story said it’s unclear which American retailers are involved in the discussions, but notes some of those known to be scouting locations in Canada are Target, Kohl’s and Marshall’s.

Warren said Target makes the most sense because the redesigned Zellers outlets look like Target stores. It also makes more sense for Target to buy some existing stores than build new ones from scratch.

“It will be like when Walmart took over Woolco.”

Warren said it’s difficult to predict if Target would want all the Zellers stores or just select ones in certain cities.

He thinks the Winnipeg stores it would most covet would be those in the Grant Park, Kildonan Place and Northgate shopping centres. He said it might shy away from the Polo Park store because it’s not very big and the rent is higher there.

Warren said Zellers owner Richard Baker is likely looking to sell the discount retail chain because it competes with the Walmart juggernaut in Canada “and it just isn’t performing for them.”

Selling also would enable Baker to focus his time and resources on bolstering his Bay operations, Warren added.

murray.mcneill@freepress.mb.ca