Target’s departure leaves malls with hole to fill
Published Friday, January 16, 2015 9:30PM AST
Last Updated Friday, January 16, 2015 9:51PM AST
Target’s announcement the retail giant will pull out of Canada, leaving behind 133 empty retail spots across the country, is one more on a list of challenges for Maritime mall owners.
Industry experts say larger stores, or anchors, play a vital role in malls.
“Target would be considered an anchor and so when they leave, that really impacts the sales of all the other stores that are in the mall, because it’s going to diminish traffic,” says Ramesh Venkat, academic director of the David Sobey Centre For Innovation In Retailing and Services.
The diminished traffic is just one of several challenges mall owners could now face with the closure of Target Canada stores.
“Just the loss in tax revenue, obviously your property taxes, you know the malls are going to lose out in the amount that they can charge in rent,” says Jim Cormier, Atlantic director of the Retail Council of Canada.
For smaller malls, where everything seems to have been centred around Target, the loss could be even more difficult.
“The Bedford Place Mall, specifically in this region, and I'm sure there are other locations in the Maritimes, but this one was, they renovated the whole place, the whole mall was redesigned around it. If you look at it from the outside, that institution felt that was the saviour of this building,” says business professor Ed McHugh.
While there may not be an obvious replacement for Target at this point, some in the retail industry say the real estate that's being left behind could be seen as an asset.
Target entered the Canadian market less than two years ago, which means recent renovations.
“Newly renovated, or even newly built, that are now going to be sitting empty,” says Cormier. “So you know, you may see some bigger retailers take the opportunity to at least investigate is it worth our while to move into one of Targets old operations.”
Although, Venkat says there are not many other big retailers to fill that hole.
“HBC sold Zellers to Target, so they're not coming back, Sears Canada is in trouble,” says Venkat.
A spokesperson for the property manager of Mic Mac Mall says nine of its properties across the country have Target leases, including Mic Mac.
He says he can’t comment on the future impact to the mall.
“We are very confident in the strength and quality of our shopping centres. They are located in key markets in Canada and we will continue to evolve and improve the retail mix in our centres,” Sebastien Theberge.
Venkat says, in order to fill the space, malls may have to come up with some creative solutions.
“Attract smaller stores, maybe restaurants, maybe other entertainment options, you know, what are some of the other things that they can do with that space?” says Venkat.
With files from CTV's Jacqueline Foster