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Exteriors of a Target store in Mississauga.

Fred Lum/The Globe and Mail

It was the Christmas season that did Target in.

When the company last reported quarterly earnings in November, chief executive officer Brian Cornell stressed that the company needed a major "step-change" to make it worth staying in Canada.

"In Canada, we're expecting much better fourth-quarter performance than we experienced last year. But we know that to succeed in Canada, we will need a major step change in performance," Mr. Cornell said on the quarterly conference call.

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That major rebound never materialized. And when he announced the company's decision to pack up and leave on Thursday, Mr. Cornell made it very clear that he lost a lot of hope because Christmas didn't pan out as he wished.

"We hoped that these efforts in Canada would lead to a successful holiday season, but we did not see the required step-change in our holiday performance," he said in a statement.

Without a major rebound, the numbers were going to stay ugly for a long time. By digging through the company's financial statements, you can calculate that Target has compiled losses worth $2.1-billion (U.S.) in Canada since the company started planning to come here in 2011. Target finally opened 24 Canadian stores in the first quarter of fiscal 2013.

To be fair, that figure includes depreciation, which is a non-cash charge. But even adding this expense back, the company still lost $1.5-billion since launching in Canada.

Early on, Target had huge upfront costs to launch the Canadian operation. Management hoped things would get better from there. But the 2014 turnaround wasn't nearly as rosy as they expected.

Target has yet to report figures for the fourth quarter of 2014, but losses over the first three quarters totalled $627-million (including depreciation). That's even worse than the $612-million lost over the same period last year.

The retailer's gross margin has also been weak, averaging about 19 per cent over the first three fiscal quarters because major sales were put in place to clear excess inventory.

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Although revenue was rising – third quarter sales hit $479-million, up 44 per cent from the year prior – Target's new chief executive didn't see reason to stay. That's probably because the cost of sales has skyrocketed. Sales rose 90 per cent so far in fiscal 2013, but cost of sales jumped 104 per cent.

Given these figures, by Mr. Cornell's estimation, it would take until 2021 to be profitable. While it's unclear if 'profitable' meant making enough to cover all the losses so far, or profitable on a quarterly basis, Target decided it just didn't make sense to stay.

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