HBC’s CEO explains why Target botched its Canadian launch—and why Saks will do better
In hindsight, maybe Target should have hired Richard Baker to oversee its foray into the Canadian marketplace. In an interview for the Globe, the CEO of the Hudson’s Bay Company pinpoints no fewer than nine mistakes made by the big box retailer, including not having an office and spending enormous amounts of money on leaseholds. He says he’s planning a “very low risk” approach for Saks Fifth Avenue’s north-of-the-border launch:
I’m opening up two stores, not 100-and-whatever stores. They paid $1.8-billion for leaseholds, then they paid $10-million per store to fix them up. They had no office, they had no buyers, they had no planners, they had no distribution centre, they had no POS [point-of-sale] system, they had no IT backbone. They created everything from scratch while we’re coming in very quietly opening up two stores with existing infrastructure.
Hopefully, this means shoppers will find Saks’s shelves plentifully stocked when the department store opens in spring 2016.
Maybe a bit cheeky to be criticizing Target for paying $1.8 for leaseholds, considering that a very large portion of that cash went into his own pocket and allowed HBC to go public.
What rubbish, I clicked on this story to expect some form of analysis, and what it it s paragraph that anyone on who is even slightly in the know could have written. I expected an article about the Target dilemma and you offer this, What is wrong with Toronto Life? You ought to start doing a better job here or people are just wasting their time.
It’s so easy to be a critic. The main thing that Target could’ve done differently was testing with only one or two stores first. Also, going all-in on former Zellers under performing locations may not have been the best idea. Target spent so much money on leasehold improvements, yet the stores look like Zellers with a paint job.
Separately, I thought that Sacks had changed strategy and was opening at Yonge & Queen instead, as part of the space currently occupied by The Bay Queen Street?
That’s not even where the store will be located, donks.
He forgets to mention Nordstrom’s who is also venturing north into the Canadian market. Nordstroms has already secured spaces in Yorkdale, Eatons Centre, and Sherway. All very successful shopping malls. Saks is extremely overpriced compared to Nordstroms. Both stores cater to the same upscale market but Nordstroms offers better pricing and sales. Good luck!