Home-improvement chain Lowe’s is planning to establish a presence on Vancouver Island by moving into empty Target Canada stores in Tillicum shopping centre and Nanaimo North Town Centre.
The North Carolina-based company is aiming to buy 13 Target Canada leases plus a distribution centre near Toronto for about $151 million.
Tillicum’s former Target location, which was remodelled before the store’s May 2013 opening, is two levels and 122,000 square feet.
Canadian Tire is planning to move into 150,000 square feet in two storeys at Hillside Shopping Centre, where the other Target store in the capital region was located.
Disastrous financial performance led Target to shut all of its 133 Canadian stores this year. Purchases of Target leases must be approved by the courts.
Lowe’s is one of North America’s largest home-improvement chains. Products range from building supplies to furniture, appliances and lighting.
The company operates 1,840 home-improvement and hardware stores across North America, including more than 70 Orchard Supply Hardware stores, its website says. Home Depot, which calls itself the world’s largest home-improvement specialty retailer, has more than 2,200 retail stores in the United States, Canada and Mexico.
If Lowe’s opens in Nanaimo, it would be going head-to-head with a 132,000-square-foot Canadian Tire in the same mall.
Lowe’s, which currently has just one store in B.C. — in New Westminster — is also hoping to take over leases in Prince George and Abbotsford.
In the rest of the country, Lowe’s is hoping to obtain leases in Calgary, Regina and Thunder Bay, Milton, North York, Ottawa, Toronto and Burlington in Ontario.
Karen Cobb, Lowe’s spokeswoman, said from North Carolina on Monday that she could not comment on any of the locations.
“We are still working through the customary contingencies and don’t expect these transactions to close until about June 30.”
Lowe’s Canada says about 2,000 jobs will be created at the stores and the distribution centre in Milton. However, it declined to provide details.
RioCan Real Estate Investment Trust is owns eight of the properties, while the rest are distributed among four owners. Tillicum is owned by RioCan and Nanaimo North Town Centre is managed by Shape Properties.
A court filing says Target Canada will receive $26.5 million, which its financial adviser said is likely more than it would have received had the locations been sold individually at auction.
Under terms of the agreement, Lowe’s has to convince other retailers to waive their rights to prohibit or restrict Lowe’s operations at the various locations. Otherwise, locations will be removed from the deal and the overall value lowered.
The agreement is subject to Ontario court approval and is expected to close by June 30.
Lowe’s is the latest major retailer to acquire pieces of Target’s retail network through a court-supervised auction.
Canadian Tire has announced it will acquire 12 leases for $17.7 million. Wal-Mart will spend $165 million to acquire 13 stores and a distribution centre, while spending an additional $185 million on renovations.
The deals leave 95 Target locations unclaimed so far.
Since arriving in Canada in late 2007, Lowe’s has opened 38 stores in Ontario, Alberta, Saskatchewan and B.C., with more than 6,000 employees.
