* Target plans to open up to 150 stores in Canada
* Target to pay Zellers C$1.825 billion, take over leases
By John Tilak
TORONTO, Jan 13 U.S. retailer Target Corp
(TGT.N) on Thursday announced plans to enter the Canadian
market, taking over leases for up to 220 Zellers stores owned
by storied domestic retailer Hudson's Bay Co.
In its first foray outside its U.S. home market, Target
said it would pay Zellers Inc C$1.825 billion ($1.84 billion)
for the leases and would run the stores under the Zellers brand
for "a period of time."
Target also said it was looking to sell its credit card
receivables portfolio, which totaled $6.7 billion as of Oct.
30. First Annapolis is advising the company on the potential
Minneapolis-based Target is the No. 2 discount chain in the
United States, trailing industry leader Wal-Mart Stores Inc
The company has more than 1,700 stores in 49 states and has
been looking for areas to expand. Chief Executive Gregg
Steinhafel told Reuters last May that Canada was a "natural"
place for the retailer to expand and 60 percent of Canadians
were familiar with the Target brand and its red-and-white
Target said it expects to open up to 150 Target stores in
Canada in 2013 and 2014 and expects financial returns on these
stores to be in line with returns on new U.S. Target stores. It
forecast a dilution in earnings ahead of the store openings,
followed by accretion in the first year of operations.
Closely held Hudson's Bay, set up with fur trading
operations across what is now much of Canada, is North
America's oldest company. Zellers is its discount brand.
(Additional reporting by Brad Dorfman; editing by Janet
(firstname.lastname@example.org; +1 416 941 8067)