Target Canada liquidation: what to expect from clearance sales

When Targets doors open Thursday morning at 8 a.m., there will be sales, thats for certain. Whether or not the sales will be good is notclear.

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On Wednesday afternoon at the Market Mall location in Calgary, there were more staff than customers in the store. They werebusy stocking shelves, changing out sale signs for clearance ones and setting up towers of toilet paper packages.

Meanwhile, the iPad cases were empty.

The art of liquidation

Liquidation is something of an art, according to Jim Danahy, a retail analyst with CustomerLAB. The sale process is not being managed by Target, but by three professional liquidators, who will entirely control the pricing strategy as Target sells off its stock and furnishings.

Youll see some disappointing discounts on the items you probably want.- Jim Danahy, CustomerLAB

Target officials say the discounts will be in the 30 per centrange, at least to start. Typically, in liquidation sales, there is a steadily increasing discount level.

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The liquidator also has the job of managing Targets landlords and suppliers, who would liketo protect other tenants. That is why the advertising around the sales must be somewhat muted without flashy "going out of business" banners.

Landlords afraid of predatory sales

"The vendors and the mall owners are trying to ensure that it doesnt become predatory,"saidDanahy. "You cant wipe out all of our other retailers [with the sale]. They cant be made to suffer because of Targets problem."

Target has said the sale will last until May 15th at the latest, although some stores may sell out their stock earlier and close.

There will be a substantial amount of stock to go through in the coming weeks. Danahy says the lead time on items that were purchased from Asia can be 90 or 120 days and Targets buyers were busy making orders in the lead up to the retailers Jan.15th announcement it was leaving Canada. Some of those orders may have been cancelled, but others are en route to Canada.

As for whether the stores will be a circus in the coming weeks, Danahy doubts it.

"I think we are going to see an orderly, very sophisticated process," he said.