The failure of Target Corporation’s (NYSE:TGT) attempted foray into the Canadian marketplace is netting the retail giant a tax break of US$1.6 billion, or more than Cdn$2 billion.
According to Target Corp.’s annual report, Target Canada still owes almost US$300 million, or around Cdn$370 million, to suppliers and other parties.
“We have recognized a tax benefit of $1.6 billion in discontinued operations, which primarily relates to the loss on our investment in Canada and includes other tax benefits resulting from certain asset write-offs and liabilities paid or accrued to facilitate the liquidation,” Target Corp. said in its annual report filed March 13
“We have realized the majority of these tax benefits in the first quarter of 2015 and expect to realize substantially all of the remainder in 2015.”
Target Canada filed for creditor protection January 15, and its parent company is recognizing an after-tax loss of US$4.09 billion from these discontinued operations for 2014. Including this loss, Target Corp. had a net loss of US$1.6 billion for the year.
Target Canada had sales of US$1.9 billion in fiscal 2014. The total net loss attributed to the Canadian operations includes US$5.1 billion in “pretax exit costs.”
Target Canada announced in January it was closing all 133 of its stores and was given approval to begin liquidation. At that time, the company announced it was planning to spend US$58 million on severance packages for its Canadian employees. This total for all 17,600 employees was slightly less than the US$61 million given as severance to ex-CEO Gregg Steinhafel.
Meanwhile, other media outlets are reporting Target Corporation has agreed to pay US$10 million to settle a class-action lawsuit related to a huge data breach that saw at the theft of personal information for an estimated 100 million people or more. Individual victims may receive up to $10,000 in damages.
-With files from Tyler Orton
