Target’s failed foray into Canada has gone from bad to worse.
According to documents filed last week with the Ontario Superior Court of Justice, the U.S. discount retailer—which filed for bankruptcy protection in January and announced it was ceasing operations north of the border only two years after its launch there—is returning 55 store leases as well as 19 offices and warehouses to their respective landlords after failing to secure bidders for the properties.
The remaining lease agreements will be auctioned off Tuesday-Thursday this week.
All 133 of Target’s Canadian stores have been shuttered since Apr. 12. The company had aimed to dispose of its leases by May 15, hoping to sell them to other retailers and salvage some cash. So far, it has only managed to sell back the leases on 11 locations, in shopping centers owned by Oxford Properties Corp. and Ivanhoe Cambridge, in a deal valued at 138 million Canadian dollars (about $114 million) before taxes.
As they gear up for this week’s court-supervised proceedings, the other landlords have voiced concern that they may have difficulty finding tenants. “Unfortunately, they’re coming in a time when the retail environment is somewhat challenging,” Edward Sonshine, CEO of RioCan Real Estate Investment Trust, Target’s largest landlord, told The Globe and Mail.