Target is beating a hasty retreat out of Canada. In four or five weeks, the company says the majority of its stock will have been liquidated and every single one of its 133 locations north of the border closed. Target has five stores in Toronto--near the Stockyards on St. Clair W., Centrepoint Mall, East York Town Centre, Cloverdale Mall, and Shoppers World on the Danforth. So what will happen to those locations when the company shuts down for good?

Although GoodLife founder and CEO David Patchell-Evans says he would like to see Target's massive retail spaces become gyms, that's unlikely to happen. Not only are many of the stores too big to easily convert to viable fitness centres, but the desirability of gyms as anchor tenants at large malls is dubious at best.

Research by CIBC predicts two retailers will bid for the available retail space: Walmart Canada and Loblaw Companies, the parent of Loblaws and Shoppers Drug Mart, among others. "Walmart would kill to get these sites; Loblaw would kill to keep Walmart from getting these sites," the report, published last week, says. Canadian Tire and Lowe's are also likely to be in the running for some Canadian locations, which have a combined value of $1.1 billion.

CIBC predicts "an aggressive bidding war" between Walmart and Loblaw (they like to use the word "war") that could see Target's real estate fetch $2 billion.

Some of the Toronto sites, however, have restrictions that prevent Loblaw from simply dropping in a supermarket. "Adding these sites could force Loblaw into the general merchandise business in a bigger way than they might like," possibly opening the door to the introduction of a new Loblaw-owned store concept, CIBC says.

Walmart Canada, on the other hand, would find it relatively easy to simply repurpose former Target locations for its own use. Target deliberately selected Zellers stores away from Walmart locations, and so, if Walmart takes over, there will be few geographical clashes.

As a result, the report predicts Walmart will bid for and win most of the 133 Target locations nationwide, and there's no reason to predict that scenario wouldn't play out in Toronto, too.

That's good news for East York Town Centre, Cloverdale Mall, Centrepoint and Shoppers World (if not for Target's 17,600 employees.) The malls will likely avoid losing significant amounts of cash as a result of an anchor location lying vacant. The Stockyards, however, is already within two kilometres of a Walmart location, so it's not clear what will happen there.

Bottom line according to CIBC: Expect more Walmart locations in Toronto.

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