On Friday my friend Paul Crowe (of BNOTIONS) wrote the following Facebook post (rant) about the retail landscape here in Canada. It was a direct response to the claims that the recent loss of Target, Mexx, and Sony is “a warning sign for our economy.” If the text is too small below, you can also click here to read it on my wall.

I would say that competition did impact these retailers, but the key message remains the same: there’s nothing wrong with failure and companies going out of business (although success is obviously a more ideal outcome).

And it shouldn’t necessarily be interpreted as a bad thing for our economy. In fact, a lot of the time it’s something quite healthy. When companies stop being competitive, the market is supposed to punish them. That’s how this game works.

The big news in the (Canadian) retail world this morning is that Target has confirmed that it will be shutting down its entire Canadian operation. That means 133 stores will close and about 17,600 employees will soon be out of work. Here’s what the CEO had to say:

“After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021,” said Brian Cornell, who became the new chief executive officer last summer.

I can already hear the keyboards typing as business schools across Canada and the world prepare this case study: Why did Target Canada fail after not even 2 years?

I don’t really want to focus on that in this post, but my initial sense is that they came in too big and too undifferentiated. Maybe they underestimated the particularities of the Canadian market and shopper, but they certainly didn’t come in lean.

They bought up over a hundred Zellers leases and used that platform to obtain a critical mass quickly. But the problem with this approach is that it meant lots of upfront costs and fewer opportunities to adjust as they gained real feedback from the market.

Regardless of what happened, I’m more interested in what the impact will be to the retail real estate industry going forward. Remember, Target is an anchor. And when it entered Canada, it was viewed as an opportunity to refresh some of our tired malls – many of which were already showing signs of dying.

So what happens now? Who comes in to fill their shoes?

Image: Flickr

Yesterday news broke that Target is opening a two-storey, 145,000 square foot store at the base of a new mixed-use development in Toronto’s emerging South Core neighborhood. The site is at the north east corner of York Street and Harbour Street. And the larger development, called Harbour Plaza, will include a 35 storey office tower and 2 residential condominium towers at 65 and 69 storeys.

Here’s the location map:

And here’s the site looking east from York Street:

This is going to be huge for Target. The amount of current and proposed density within a short radius of the site is mind boggling. In addition to Harbour Plaza itself, look at what’s planned for 1 Yonge Street.

Plus with Union Station next door, I dare you to try and find a better connected mobility hub in the region. Now all of a sudden that retail radius gets even bigger. I can easily imagine suburbanites picking up a few things before they hop on a GO train (our regional rail system) and head home.

As of right now, they’re also the only game in town, as far as big box stores in the central core are concerned. But I wouldn’t be surprised if we see a competitor emerge alongside the 1 Yonge project. The site is big enough for one and Walmart isn’t going to want to get shut out of the area.

My only hope is that, from an urban design standpoint, the project is able to enliven and give back to Harbour Street. Right now it’s an arterial road with really no redeeming urban qualities. But with the York Street off-ramp being relocated and the park underneath it being expanded, now is the time to really transform the area.

Let’s hope Harbour Plaza does that.

On Friday my friend Paul Crowe (of BNOTIONS) wrote the following Facebook post (rant) about the retail landscape here in Canada. It was a direct response to the claims that the recent loss of Target, Mexx, and Sony is “a warning sign for our economy.” If the text is too small below, you can also click here to read it on my wall.

I would say that competition did impact these retailers, but the key message remains the same: there’s nothing wrong with failure and companies going out of business (although success is obviously a more ideal outcome).

And it shouldn’t necessarily be interpreted as a bad thing for our economy. In fact, a lot of the time it’s something quite healthy. When companies stop being competitive, the market is supposed to punish them. That’s how this game works.

The big news in the (Canadian) retail world this morning is that Target has confirmed that it will be shutting down its entire Canadian operation. That means 133 stores will close and about 17,600 employees will soon be out of work. Here’s what the CEO had to say:

“After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021,” said Brian Cornell, who became the new chief executive officer last summer.

I can already hear the keyboards typing as business schools across Canada and the world prepare this case study: Why did Target Canada fail after not even 2 years?

I don’t really want to focus on that in this post, but my initial sense is that they came in too big and too undifferentiated. Maybe they underestimated the particularities of the Canadian market and shopper, but they certainly didn’t come in lean.

They bought up over a hundred Zellers leases and used that platform to obtain a critical mass quickly. But the problem with this approach is that it meant lots of upfront costs and fewer opportunities to adjust as they gained real feedback from the market.

Regardless of what happened, I’m more interested in what the impact will be to the retail real estate industry going forward. Remember, Target is an anchor. And when it entered Canada, it was viewed as an opportunity to refresh some of our tired malls – many of which were already showing signs of dying.

So what happens now? Who comes in to fill their shoes?

Image: Flickr

Yesterday news broke that Target is opening a two-storey, 145,000 square foot store at the base of a new mixed-use development in Toronto’s emerging South Core neighborhood. The site is at the north east corner of York Street and Harbour Street. And the larger development, called Harbour Plaza, will include a 35 storey office tower and 2 residential condominium towers at 65 and 69 storeys.

Here’s the location map:

And here’s the site looking east from York Street:

This is going to be huge for Target. The amount of current and proposed density within a short radius of the site is mind boggling. In addition to Harbour Plaza itself, look at what’s planned for 1 Yonge Street.

Plus with Union Station next door, I dare you to try and find a better connected mobility hub in the region. Now all of a sudden that retail radius gets even bigger. I can easily imagine suburbanites picking up a few things before they hop on a GO train (our regional rail system) and head home.

As of right now, they’re also the only game in town, as far as big box stores in the central core are concerned. But I wouldn’t be surprised if we see a competitor emerge alongside the 1 Yonge project. The site is big enough for one and Walmart isn’t going to want to get shut out of the area.

My only hope is that, from an urban design standpoint, the project is able to enliven and give back to Harbour Street. Right now it’s an arterial road with really no redeeming urban qualities. But with the York Street off-ramp being relocated and the park underneath it being expanded, now is the time to really transform the area.

Let’s hope Harbour Plaza does that.