With Its Winnings Down, Target Bets Big on New Stores, New Brands, New Prices
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Target is struggling just like its competitors. But unlike the competition, the marketer isn’t closing stores. Instead, the Minneapolis-based retailer intends to make its existing 1,800-unit fleet work harderand it’s spending heavily to make it happen. At its annual financial community meeting Tuesday in New York, Target announced it plans to invest $1 billion in annual operating profits starting this year, along with $7 billion in capital over the next three years, in order to remodel stores, improve digital infrastructure and supply chain operations and introduce new in-house brands.
“Evolution is in our blood,” said Brian Cornell, chief executive. “While others are pulling back, Target is investing to compete and investing to grow.”
It’s an aggressively risky strategy considering the chain also reported dismal holiday and 2016 results, as it continues to compete with Walmart and Amazon. Same-store sales for the fourth quarter fell 1.5% and dropped 0.5% for the full year. The company saw fourth-quarter sales fall 4.3% to $20.7 billion. Not pleased, investors sent the brand’s stock down more than 12% by early afternoon on Tuesday.
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