Posts Tagged ‘Target Corporation

31
Mar
16

Is Target Corporation in Trouble?

Target Corporation a once promising retailer who drew in retail shoppers by the drove for their interesting line of merchandising which included mod retro fashions for women and men as well as interesting lines of home furnishings and accessories seems to be in trouble of late. After trying to aggressively expand in Canada, Target quickly closed all their entire Canadian operations and laid off their entire staff there after generating huge losses. They gave former Target Canada CEO Gregg Steinhafel’s a ‘walk-away’ package estimated at $61M (more than the entire severance for all the Canadian employee’s combined) for leading the expansion plan fiasco. Enter a Target store of late and you notice cheap, dull merchandising, limited hours of operation and empty parking lots. Although their stock is trading near multi-year highs, Target is inevitably in trouble. With stiff competition from other department stores, clothing chains and dollar stores competing for a declining demographic the fact is Target’s quality has dropped so dramatically it cannot compete. Recently downgraded by Barclay’s, Target has become too reliant on department store credit cards and huge markups on low quality merchandise as well as derivatives trading to generate profits and forgot what consumers want. It is following Kmart’s model and unless it strays away from that, it will follow the fate of the Canadian subsidiary.

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