Target Expands Plans to Remodel Existing Stores
October 19 2017 - 11:51AM
Dow Jones News
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)
Copyright (c) 2017 Dow Jones & Company, Inc.
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