Target Closing Stores, Target (TGT) is closing 13 of its stores because they are proving to be a drain on its financial results despite getting years to prove themselves.
The discount retailer, which typically announces store closings at this time year in anticipation of winding them down right after the holiday season, usually pulls the plug on a store if a given location has seen its profits shrink for several years, a Target spokesperson told Fortune by e-mail. The stores include locations in Minnesota and Wisconsin.Target operates about 1,800 stores nationwide. The retailer has made it a top priority to improve the appearance of stores and the presentation of merchandise in those locations, something CEO Brian Cornell told his peers at an industry conference last week has proven to be a boon for its sales of home goods and apparel.
In August, the retailer reported a 2.4% increase in comparable sales for the second quarter, besting rivals like Walmart WMT and Macy’s [fortune-stocks symbol=”M”], so Cornell is clearly eager to ditch stores that aren’t carrying their weight.
Since taking the reins last year, Cornell has not hesitated to pull the plug on unprofitable parts of the business, most notably Target’s ill-fated, poorly executed expansion into Canada which cost the company $7 billion.
Earlier this year, Target announced a $2 billion, two-year cost savings plan that included the elimination of several thousand jobs in the Minneapolis area, where it is headquartered. It also announced it would pour $1 billion into its e-commerce as it looks to compete with Walmart and Amazon.com in particular.
Other retailers to have announced store closings this year include Macy’s, which said in September it would close 40 of nearly 800 stores, and J.C. Penney JCP.
The discount retailer, which typically announces store closings at this time year in anticipation of winding them down right after the holiday season, usually pulls the plug on a store if a given location has seen its profits shrink for several years, a Target spokesperson told Fortune by e-mail. The stores include locations in Minnesota and Wisconsin.Target operates about 1,800 stores nationwide. The retailer has made it a top priority to improve the appearance of stores and the presentation of merchandise in those locations, something CEO Brian Cornell told his peers at an industry conference last week has proven to be a boon for its sales of home goods and apparel.
In August, the retailer reported a 2.4% increase in comparable sales for the second quarter, besting rivals like Walmart WMT and Macy’s [fortune-stocks symbol=”M”], so Cornell is clearly eager to ditch stores that aren’t carrying their weight.
Since taking the reins last year, Cornell has not hesitated to pull the plug on unprofitable parts of the business, most notably Target’s ill-fated, poorly executed expansion into Canada which cost the company $7 billion.
Earlier this year, Target announced a $2 billion, two-year cost savings plan that included the elimination of several thousand jobs in the Minneapolis area, where it is headquartered. It also announced it would pour $1 billion into its e-commerce as it looks to compete with Walmart and Amazon.com in particular.
Other retailers to have announced store closings this year include Macy’s, which said in September it would close 40 of nearly 800 stores, and J.C. Penney JCP.
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