Most remaining Zellers stores to close

A Zellers store, May 25, 2012. (QMI Agency/KARL TREMBLAY)

A Zellers store, May 25, 2012. (QMI Agency/KARL TREMBLAY)

QMI Agency

, Last Updated: 3:54 PM ET

MONTREAL - Hudson's Bay Company (HBC) announced Thursday it will close most of its Zellers stores by next March after the sites were left out of a leasing deal with U.S. retail giant Target.

Target acquired the rights to 189 other HBC-owned Zellers stores in January 2011, leaving the fate of about 64 stores hanging in the balance. As many as 6,400 Zellers employees could lose their jobs across Canada.

After a lengthy review and numerous discussions with various parties, it became apparently that continuing to operate the Zellers banner in its current form was not viable, particularly given the geographic footprint of the remaining locations, HBC spokeswoman Tiffany Bourre said in an e-mail.

The Bay said it might re-brand and preserve an unspecified number of Zellers locations, though the spokeswoman didn't provide details.

Target plans to transform some or all of its 189 newly acquired Zellers stores into Target outlets starting next spring.

The expected $3.5-billion capital investment in Canada will create 20,000 jobs across the country.

It's not clear if those are all new jobs.

Zellers employees won't automatically be hired to work at the new Target outlets, but Target has promised to "make it easy for them to apply for jobs."