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A hitch in Target's plans Add to ...

Joe Zito couldn’t be happier about Target Apparel setting up shop in his Sudbury, Ont. mall, a move that drew a rush of holiday shoppers.

But the Target that opened in Sudbury – and another one that opened last fall in Nanaimo, B.C. – isn’t owned by Target Corp. of Minneapolis, Minn., the retailing giant that last week announced a $1.8-billion deal to buy Zellers stores and convert them to the Target banner by 2013. It’s owned by a Toronto-based retail mogul who has claimed ownership of the Target name.

Now, the American Target wants to make sure it’s the only Target in Canada. The U.S. chain has asked the Federal Court of Canada for an injunction to ban Isaac Benitah, who runs Fairweather, International Clothiers and other Canadian fashion chains, from using the Target name and its signature bull’s eye logo.

On Monday, Mr. Benitah shot back: he asked the court for exclusive rights to the name and his own injunction to stop the American discounter from using the Target name in Canada. In a court filing, he asked for $250-million in damages from Target Corp. or its “profits unjustly gained by such unlawful conduct.”

At stake in the fight is Target’s bid to enter Canada with its affordable fashions and home-decor lines by high-profile designers. Ultimately, it could all come down to a payoff – how much money Mr. Benitah can collect from the popular U.S. merchant to persuade him to drop the Target moniker.

“It’s probably a case of ‘How big a cheque do you want me to write you?’” said Mr. Zito, vice-president of operations at Vista Hospitality Canada, which manages the Rainbow Centre Mall in Sudbury where Target Apparel opened in December.

“In the overall retail war, the American Target is going to win out,” Mr. Zito said. “It’s just a question of how much money they’re going to give the Canadian Target.”

Target has been tangling with Mr. Benitah for almost a decade over rights to the name. That’s how long the U.S. discounter has toyed with bringing its outlets to this country.

In 2002, the U.S. chain first took issue with Mr. Benitah’s right to use the moniker. The Federal Court of Appeal ruled in his favour five years later. Last summer, the U.S. company filed another challenge with a Canadian trademark office, arguing that because Mr. Benitah hadn’t used the Target name for three years, his right to it had dissipated.

In November, Target Corp. went further, seeking the court injunction and more than $50,000 in damages.

Mr. Benitah acquired the Target Apparel brand for men’s clothing in 2001 from the failed retailer Dylex Ltd., which had owned Fairweather. About six months later, Target Corp. filed a challenge with the federal trademark office, which agreed with the U.S. company. But the Federal Court of Canada overturned the decision.

The appeal court upheld the ruling in 2007. In the meantime, Mr. Benitah opened his first Target Apparel store in Toronto in 2005 and today intends to open more, according to court documents.

Amy Reilly, a spokeswoman for Target, said late Monday the company couldn’t comment on pending litigation.

“Target expects to rely on the same name and brand elements to market in Canada, including Target, the bull’s eye and [the slogan]‘Expect More. Pay Less,’” another spokeswoman, Dustee Tucker Jenkins, said in an e-mail last week.

In a court filing, Target said the Canadian retailer’s Target trademark doesn’t give it the right to operate a retail store under the banner Target or Target Apparel.

The Toronto-based retailer’s use of the Target moniker on its stores is “deliberately calculated to deceive and confuse the public in Canada,” the company said in its filing.

“Customers familiar with Target stores, who shop at [the Canadian]store and mistakenly infer that it is commercially related to [Target’s]stores, are likely to be disappointed,” Target said. “They will have reason to believe that [Target has]decided to operate stores in Canada with lower standards and quality.”

In Sudbury, Mr. Zito said all the publicity about Target is prompting more shoppers to head to his mall. Last month, it enjoyed between 20 to 25 per cent more traffic, according to his figures. “More people are checking us out.”

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  • Updated August 18 4:02 PM EDT. Delayed by at least 15 minutes.

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