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Managing Small businesses to feel impact of Target's departure from Canada

Empty checkout counters are seen at a Target store in Lindsay, Ontario January 15, 2015.

FRED THORNHILL/REUTERS

With Target announcing its departure from Canada, small businesses will be feeling a variety of effects, both positive and negative, in the immediate and long term.

While the exit of the American retail chain does leave a void that can be readily filled by local small businesses, some Canadian entrepreneurs have come to rely on Target to act as a flagship attraction for malls and other shopping spaces, while others depended on Target to stock their products.

"I think if you're a small retailer it's about how to harness disruption, because it will create opportunity," Michael Leblanc, senior vice president of the Retail Council of Canada.

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One small business that has already reaped the rewards is Toronto-based startup AskforTask, an online platform that allows "askers" to hire "taskers" for odd jobs and assignments.

"With stores closing in Canada it's been driving people towards the sharing economy platform," said Andrew Chapados, AskforTask's communications coordinator, adding that the website saw an 800 per cent spike in user signups yesterday following the announcement. "We've just been trying to keep up with the huge influx in our user base."

When Target first entered Canada in early 2013, Mark D'Onofrio, president of Pickering-based Cocoa Jewelry Inc., was excited to design a line exclusive to the retail chain.

"In working with them for just over a year we didn't see them addressing fundamental issues, like getting product to shelves, which is the most important thing in the retail business," he said, adding that the company severed its ties with Target in late 2013. "We saw too many red flags."

Mr. D'Onofrio admits that he was lucky to not be affected by the company's departure from Canada, but many small businesses weren't as fortunate.

According to Mr. Leblanc, however, it's not all bad news for those entrepreneurs that got their big break by partnering with Target, only to watch the retailer exit the market shortly thereafter.

"It does mean you've introduced yourself to a very large retail organization, and Target isn't going anywhere," he said. "If you're a vendor and you've got an interesting product on the shelves of Target and they've seen some success with it, it might just end up at a border store and there could be opportunity there."

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Those small businesses whose products remain on the shelves of Target's soon to be vacant stores, however, will have to wait and see what the company does with those assets.

"Everything is kind of frozen now, everybody stands in place in these processes, and it will be up to the trustee on what they're going to do with those goods," said Mr. Leblanc. "It'll be interesting days for the next 12 to 18 months, that's for sure."

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