Its official!!
U.S. retailer Target said Thursday it is buying the store leases of Canadian discount retail chain Zellers from Hudson's Bay Co. for $1.8 billion.
Under terms of the deal, Minneapolis-based Target will pay two payments of $912.5 million in cash, in May and September 2011, to acquire the leasehold interests of 220 Zellers locations in Canada.
The Zellers locations will continue to exist under that brand name for "a period of time," HBC said in a release. But Target will convert 100 to 150 of those Zellers locations to Target stores in 2013 and 2014 and sell the rest of the current Zellers network of store leases to other retailers.
"This transaction provides attractive long-term value and will allow us to invest substantial capital into our department store and specialty store businesses to continue to drive growth," HBC governor Richard Baker said in a release.
A typical U.S. Target location employs between 100 and 200 people, so the deal should see the creation of some jobs. And Target estimates it will make an aggregate investment of more than $1 billion updating and renovating Zellers locations.
Baker's company bought all of HBC in 2008 for $1.1 billion. Selling the underperforming Zellers unit at a profit allows the company to focus on the iconic Bay brand, an initial public offering of which is much anticipated.
Read more:
http://www.cbc.ca/money/story/2011/0...#ixzz1AveXyq5q
