American retailer Target said on Thursday it will cease operations in Canada and has filed for creditor protection for its Canadian subsidiary in a surprise move that could put its 17,600 employees in the country out of work.

The US discount retailer has struggled since its 2013 launch in Canada, and it said in November that it would review the future of its loss-making Canadian business after the holiday season.

Huge supply chain problems left stores thinly stocked, disappointing shoppers who had eagerly anticipated the retailer's move into Canada, where the discount retail space had long been dominated by Wal-Mart Stores.

Target, which currently has 133 stores in Canada, said it has sought bankruptcy protection in Canada and that it plans to discontinue operating stores in Canada through its indirect wholly-owned subsidiary, Target Canada Co.

It said stores would remain open during liquidation, and that with court approval it would pay all of its Canadian employees a minimum of 16 weeks of compensation.