Blog: Target misses its aim
Leonie Barrie | 18 November 2008
Target, the US’ second largest discount store chain, made a mark for itself by teaming up with designers such as Isaac Mizrahi to set the standard for mass-market, cheap chic fashions. But now its customers don’t want trendy designer clothes and home decor – at least not in the same volumes as before – and are switching to even cheaper rivals such as Wal-Mart for basics like food and toiletries.
In its third quarter results release yesterday (17 November), Target said net earnings slipped 23.6% to $369m from $483m. Total sales rose 1.9% to $15.1bn, helped by the addition of new stores, but same-store sales in its retail segment dropped 3.3%.
Worryingly, however, its credit card business points to the troubles ahead, with profits here slumping 83% to $35.0m. While this is just a small share of the firm’s total turnover, its significance is that this decline in performance was partly due to higher bad debts as shoppers struggled to pay their bills.
All of which doesn’t bode well for the holiday season. As a result, Target has “temporarily suspended” most of its share repurchase activity, and reduced 2009 capital expenditures by about $1bn. It is also planning an aggressive campaign to “deliver compelling reasons” for people to shop at Target including “great prices” on everyday basics and fashion items.
Even so, it still expects same-store sales to fall by 6-9% in November.
Some of just-style’s more eagle-eyed readers might have noticed a small change to the menu bar on the homepage: the addition of the word re:source. Yes it might be a small change – but it marks the co...
Over the past week just-style has continued to try to unravel the potential ramifications of Donald Trump’s election as the next president of the United States....
One event dominated the international airwaves last week, and on just-style too we took a closer look at the surprise election of Donald Trump as the 45th president of the United States....
As the Brexit roller-coaster continues to twist and turn, and the US presidential election campaign nears its unpredictable and possibly protectionist end, there's no doubt these events – and the perc...
- Steps to piloting living wage in garment factories
- Trump blows the case for Brexit out of the water
- How to ensure sustainability is more than a slogan
- US apparel retailers' November 2016 sales roundup
- Duty-free trade key to build Africa supply chains
- US Q3 in brief – Destination Maternity, Cherokee
- Taiwan textile maker investing in first US plant
- Outdoor apparel sector set for double-digit growth
- Myanmar garment industry "lacking labour rights"
- Adidas NYC flagship raises the bar on sport stores