Know how much Gregg Stienhafel got when he was jettisoned as CEO of Target last year? A cool $61 million U.S., according to Fortune magazine, when factoring in equity, stock options and deferred compensation.
I just bet that Mrs. Stienhafel, if such a person exists, isn’t doing much of her shopping at the giant discount retailer these days.
The rest of you — some 17,600 employees who will lose their jobs in the next four or five months as the chain shutters its 133 stores in Canada — will get about 16 weeks’ severance pay. Don’t spend it all in one place.
Given that Target only ventured north of the 49th parallel two years ago, that’s probably a fair financial reckoning. These aren’t lifers we’re talking about. Still, that’s a whole whack of workers hitting the unemployment lines. Economic ripples will be felt.
Canadians just didn’t take to Target, the second-largest U.S. discount chain. Consumers were displeased by the higher prices here, compared to what they would pay cross-border shopping Target. Merchandise was scant on the shelves, as the company had immense difficulties keeping stores stocked. Many of their stores — particularly the 220 acquired through purchasing leases from Zellers Inc. — were poorly situated, although Target, like Walmart, has been making raid moves toward to city centres. That Zellers deal, by the way, resulted in the pink-slipping of 27,000 employees.
So altogether Target has thrown nearly 35,000 Canadians out of work.
Packing up their dolls and dishes and polyester dresses.
While I don’t begrudge Minneapolis-based Target for its great expansion experiment, first time it has ventured outside the U.S., and understand why shareholders paled over nearly $2 billion in losses, the venture was inexcusably mismanaged from the get-go. And competently fended off by chains that were here first, with pre-existing loyalties.
Target Canada wasn’t cheap, its inventory wasn’t attractive and the entire shop-in-person retail industry was already in upheaval.
Me, I’ve never much grasped the attraction of department stores beyond their one-stop convenience. That convenience has now been overtaken by the uber-handiness of browse-friendly online shopping. If rivals such as Walmart have endured, it’s largely because they’ve incorporated groceries — food — as a retail category. Perishables don’t ship well and just about everybody still has get their gross weekly.
The big-elbow chains never much cared about the small retailers they put out of business. But department stores as we once knew them — the era of Simpson’s and Eaton’s, or “English people stores” as I, the daughter of immigrants, viewed them while growing up in downtown Toronto, staffed by ladies in twin-sets and pearls — are clearly a dying breed. These “bricks and mortar behemoths have been undermined, in the main, by cooler (particularly for younger consumers) brand-specific vendors of dry goods (now there’s an archaic phrase) such as H&M and Banana Republic, which have increased their market share by driving down prices. Though I suspect the upstarts’ time will come too, in time, as it did for Jacob, Smart Set and the Montreal-based Mexx Canada, all of which have pulled the plug. Le Chateau, prom-dress central for two generations of Canadian teenagers, is on shaky legs too.
No doubt much of this retail convulsion has been brought on by the evolution of consumerism in a cyberworld universe, just as Amazon has knocked off independent booksellers, and big-box Best Buy — itself posting humongous losses in recent years — buried smaller electronics merchants such as Circuit City.
For many of us who are not so digitally smitten, shopping still means strolling on a Saturday morning, window shopping on Queen St. W., and patronizing the stores where we feel welcome and well-served, eyeballing merchandise and seeking assurance from a real live salesperson to the universal query: Does my bum look big in this?
As with newspapers, I continue to have faith that a discriminating public will continue to value the hands-on experience of shopping in boutique or niche stores and the pleasures that come with human contact. We are still, I hope, social animals and shopping, like eating out, is intrinsic to that — just not shopping in antediluvian department-store temples which have increasingly catered to a lowbrow common denominator.
Only the upscale department stores — Nordstrom, Neiman Marcus, Saks Fifth Avenue (which will soon take over most of the Hudson’s Bay flagship property at Queen and Yonge; the Bay actually bought Saks in late 2013) — appear safe from retail incursion.
Young people have no nostalgic attachment to the department emporiums of old, just as my generation looked askance at the quaint five-and-dimes such as Woolworth’s. Yet, as a recent article in The Atlantic titled “The End of Retail is Overrated” revealed, much to my surprise, e-commerce, while doubling in the past decade, still accounts for only about 6 per cent of total U.S. retail. While you can now shop till you don’t-drop on smartphone apps that have rendered even traditional online shopping obsolete — entering a store, if you wish, scanning barcodes and checking out within minutes, or doing it in virtual-reality comfort from your nearest Starbucks — the hordes still walk the walk. Indeed, according to a recent Pew Research study, though nearly 80 per cent of teenagers shop on line, an equal number reported they would prefer to shop in stores.
Just not outdated department stores like . . . that bullseye logo place.
So long. We hardly knew ya.