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Why Target Is Raking Up Its Maple Leaves

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Photographer: Daniel Acker/Bloomberg

In late December, just four months after taking the helm of America’s third-largest mass merchant, Brian Cornell decided to take a road trip of sorts. He set off on a weeklong journey across Canada to get a firsthand look at Target’s troubled stores there. He traveled alone—no PR handlers, no other executives, according to a company spokesperson. The still-new chief executive officer was searching for the unvarnished truth about a division that had lost $2 billion since its creation in 2011 and helped end predecessor Gregg Steinhafel’s 35-year career at the chain. The unit was the Minneapolis-based discounter’s first international expansion, employed 17,000 people, and was a crucial component of its growth strategy.

What Cornell saw during his sojourn sealed Target Canada’s fate. The stores were empty, though it was just before Christmas. A few weeks later, with lackluster sales numbers backing up what he’d witnessed, Cornell, who also serves as chairman, told the board that Target should pack its bags and head home. They agreed, and on the next day, Jan. 15, the chain announced it would liquidate its 133 stores in Canada—resulting in a $5.4 billion writedown—and predicted it will cost as much as $600 million to dissolve the business. “Obviously a very tough, a very difficult decision,” Cornell said that day in a conference call with analysts. “But we absolutely believe it’s the right decision.”