TGT Target Corp

By Khadeeja Safdar 

Target Corp. said it would expand plans to remodel its existing supercenters and open smaller stores in cities, as the retailer seeks to win back shoppers in the competitive retail environment.

At a media event Thursday, Target executives said they now plans to remodel more than 1,000 of its 1,800 existing stores by the end of 2020. Earlier this year, company executives said they planned to remodel 600 stores over three years, part of a $7 billion investment, including lowering prices and investing in e-commerce, to reverse a slide in sales.

Chief Executive Brian Cornell declined to say whether the new pace of remodels would increase Target's spending plan, saying he would provide an update at the next meeting with financial analysts. He said sales have increased 2% to 4% at recently renovated stores.

The company has remodeled 110 stores so far in 2017. It is opening 32 new stores in 2017 and 35 next year. The company is putting smaller stores in urban areas and college towns. It is opening 11 such stores this week, bringing the total number of smaller stores to 55 so far.

Mr. Cornell is trying to turn around the retail chain's fortunes after it reported weak holiday sales last year and was forced to lower its profit and sales goals for the current fiscal year. Some of his moves, including lowering prices and remodeling stores, helped the company report a sales increase in the third quarter.

The new locations will help Target as it seeks to balance shifting consumer habits, with more people shopping online and making fewer visits to stores. The company hopes to use both its suburban and urban locations to delivery more online orders as well as for customers to pick up goods.

Rival Wal-Mart Stores Inc. said recently that it would open fewer U.S. stores than it has in at least 25 years and deepen its cost-cutting efforts, to free up cash for e-commerce and store improvements. Last week, Wal-Mart said it would only open about two dozen U.S. stores next fiscal year, but the discounter has been ahead of Target in remodeling its existing supercenters and ramping up its web business.

Meanwhile, Amazon.com Inc. has been pushing deeper into physical retailing. It acquired high-end grocery chain Whole Foods earlier this year and has struck a partnership with department store chain Kohl's Corp. that lets shoppers return Amazon goods at about 80 Kohl's locations.

Shares of Target, which have fallen 16% so far this year, rose 21 cents to $60.23 Thursday morning.

Write to Khadeeja Safdar at khadeeja.safdar@wsj.com

(END) Dow Jones Newswires

October 19, 2017 11:36 ET (15:36 GMT)

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