Target buying leases of Canada’s Zellers

NEW YORK – Target is expanding north, agreeing to acquire most leases of Canadian retailer Zellers and planning to open its first Canadian stores in 2013.

Target Corp. said Tuesday it will pay $1.83 billion Canadian ($1.85 billion U.S.) for the 220 Zellers leases from Hudson’s Bay Co. Target aims to convert 100 to 150 of those into Target stores throughout Canada in 2013 and 2014.

The remaining stores will go to other as-yet-undetermined retailers or landlords, Target spokeswoman Lena Michaud said.

Until the new stores begin to open, Hudson’s Bay will sublease the stores back from Target and keep operating them as Zellers.

Target also says it will try to sell its $6.7 billion credit card receivables portfolio, a move some activist investors have pushed for a long time, to help finance the deal.